The IT survival guide for uncertain times

Economic volatility is the new normal. Don't wait until the next recession hits to figure out how you'll respond

IT leaders looking to make the IT of the future happen at their organizations will first have to survive until the future gets here.

In other words, the "old IT" -- IT as we now know it -- is about to become very important.

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And for anyone thinking of skipping ahead, know that the "new IT" -- the IT that says "here's how" rather than "no," that encourages end-user innovation rather than stifles it, and that builds technology to support practices as well as processes -- isn't simply a replacement. It is something IT leaders will have to take hold of in addition to the old IT.

As I write these words, most economic indicators aren't looking too promising, and that's the good news. If the debt ceiling hadn't been raised, depending on which economist you prefer, the forecasts ranged from even worse to so bad you don't want to think about it. If you haven't pulled out your TECAP and made sure it's up to date, you could very well be hosed.

For those thinking of searching Google, don't bother. TECAP stands for "The Economy Crashed Again Plan" and I just made it up. Unless and until our economy stabilizes, your TECAP is arguably more important than your business continuity plan. After all, when the only thing you can count on is varying degrees of recession showing up on a regular basis as a way of life, you might as well know how you're going to handle them when they do.

If you haven't given thought to your TECAP, here are the key principles to keep in mind.

IT survival tip No. 1: Leadership teamwork

One thing that matters in a good economy but is the difference between surviving and sinking in a bad one is whether your leadership "team" is a leadership team -- whether the managers in your organization trust one another and share a common commitment to the organization's purpose and direction.

This trust is difficult to quantify, but its importance becomes readily apparent when we move to the next IT survival tip.

IT survival tip No. 2: Worst things first

Like it or not, when the economy sinks you will lay off staff. If you don't know who it's going to be before you have to do it, the result will be an exercise in spreading the pain equally instead of doing what's necessary. You need your leadership team in consensus on this part of the plan.

One complicating factor: Ranking employees in order of who you can least afford to lose isn't the same as ranking them in order of performance or value. This is your list of who you need most to keep the joint running (to turn a phrase).

If the economic outlook doesn't get too bad, you'll be able to keep your high-value employees, too. But if the bottom falls out, many of them may have to go.

The question to ask yourself: How do you know which is which? Here's what the answer probably isn't: Your management team will tell you.

Oh, they'll have valuable insights on the subject, and if they're truly a team, their insights will mesh instead of becoming a source of conflict. But they all suffer the same, insurmountable handicap: They're managers, which means their view of how work actually gets done is obstructed by all of the employees who, for one reason or another, want to block that view.

If you want to know which members of the IT staff must be kept -- and, for that matter, which ones are the most valuable to the organization -- you need to talk with staff-level employees both inside and outside IT.

Just ask. "Other than yourself," you might phrase the query, "who in IT is most important when it comes to keeping the lights on?"

If you really want to have fun, compare your managers' list to the one you develop by asking employees.

IT survival tip No. 3: Manuever the budget

There's a set of numbers every CIO should have at his or her fingertips. That's the breakdown of the IT budget between discretionary and nondiscretionary spending.

Nondiscretionary spending is everything you can't stop paying for if the business is going to continue to operate. It includes the data center, networks, and everything required to run them. It includes software maintenance. It includes recurring license fees. It includes whatever you spend to be compliant with all applicable regulations.

And it includes the cost of the skeleton crew you need to handle these commitments.

Discretionary spending is just about everything else: what you spend for moves/adds/changes (in TECAP land, business managers will have to hold off moving employees around), small software enhancements, most major application-related projects (while there are no IT projects, there are lots of endeavors that need information technology), build-outs of branch offices (if the business can afford to open a branch office, the Crash hasn't affected it enough for you to haul out your TECAP), and probably a good chunk of information security.

Yes, that's right: information security. I'm not saying it's unimportant. I'm saying that if you have to choose between paying your MPLS carrier and paying for information security, MPLS wins. A lot of businesses run on luck because they can't afford to spend much on risk management. If you have to put your TECAP into play, you might be one of them.

Now that you have the numbers, rank discretionary spending in order of importance. If you have to cut, you'll want to cut from the least important on in, of course.

As for the nondiscretionary spending, 2008 changed the rules for a lot of companies. The rule used to be that you invest in infrastructure to minimize the cost of growth. Now that economic volatility is the new normal, this way of working shouldn't be automatic; once you use infrastructure to keep down the cost of growth, you can't shed costs very easily if growth turns into shrinkage.

This is, by the way, the single most compelling economic argument in favor of cloud computing -- not that it's less expensive, but that it lets you shrink spending without penalty when processing volume decreases, assuming you've negotiated your contracts properly.

One more thing: If you haven't virtualized everything you can in the data center, what are you waiting for? What virtualization adds to your TECAP is that it cuts the cost of infrastructure by putting your spare capacity in a single shared pool instead of needing to allocate headroom application by application. All in all, you'll need less spare capacity that way -- and that slashes your infrastructure bills.

IT survival tip No. 4: Pinpoint organizational chart luxuries

Here's one you should probably do without involving your leadership team: Decide which branches of your organizational chart are, in the last analysis, luxuries you could do without.

Do you have a technical architecture team? If you have to cut deep, you might have to make do with a less formal approach to architecture. A PMO? Likewise, assuming you have any projects left. Business relationship managers? Sorry, we're talking about hacking to the bone right now, and they don't qualify as bone.

Another luxury you might have to cut back on is managers and supervisors. It isn't that they provide no value. It's that if you compare the value managing the work delivers to the value the work itself delivers, the work will probably win.

* * *

A plug: If you decide you want a more in-depth look at IT cost control, my friend Anita Cassidy's "A Practical Guide to Reducing IT Costs" is your bible -- highly recommended.

This story, "The IT survival guide for uncertain times," was originally published at InfoWorld.com. Read more of Bob Lewis's Advice Line blog on InfoWorld.com. For the latest business technology news, follow InfoWorld.com on Twitter.

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