Take advantage of the recession

Take the opportunity to challenge the status quo, eliminate ineffective systems and services, and make changes that management previously refused to consider

Virtually every IT organization is feeling the impact of the recession. Many have been forced to cut services, and some have cut staff as well. Most new projects have been eliminated, even those with compelling business cases. Organizations have cut all the fat (to the bone, in some cases) to meet budget constraints.

But there is a silver lining. The recession provides an opportunity to challenge the status quo, eliminate ineffective systems and services, and make changes that management has previously refused to consider.

[ Learn more about how the financial crisis is affecting IT and the high-tech industry, plus what IT can do to help, in InfoWorld's special report. ]

So take advantage of the recession to get some important things done.

Question practices. During a recession, management demands maximum efficiency and is more open to new ideas. Most companies have at least a few business practices (and supporting applications) that have been unexamined for years. Often, they were instituted for a specific competitive situation or in response to an executive's request. Although the original justification may no longer be valid, the practice or application persists.

The recession is your chance to kill those dinosaurs. Take courage from IT pioneer Rear Adm. Grace Hopper, who said that the most dangerous words are "We've always done it that way." Instead of accepting the status quo, ask how things would be handled if the company were just starting out today.

Develop multiple budgets. Many corporations are developing "contingent budgets" describing multiple levels of spending cuts that will be made if revenues are down by certain amounts relative to last year. Those budgets also identify investments that can be made if revenues unexpectedly increase.

You should do the same. Determine what your IT organization will do in various scenarios before you're forced to react. Create several plans in case there are multiple rounds of budget cuts. Also identify and prioritize new projects to spend money on in case the economy improves and the business demands new capabilities.

Measure performance. The management dictum "If you can't measure it, you can't manage it" is good advice for IT execs. In the absence of accurate data, IT services may be seen as being too expensive, prompting discussions about outsourcing. A good system of accounting for costs and IT time is critical. Know unit costs and service levels for all IT services -- including supplier performance -- and compare them to industry norms.

Strengthen governance. A recession exacerbates competition for limited resources and increases pressure on IT. In difficult times, it's even more critical for executive management to establish priorities, make appropriate trade-offs and monitor program performance.

Increase agility. Criticism of long IT delivery schedules is more severe in times of rapid business change. Agile development, with deliverables every one or two months, is required during such times. Adopt rapid development techniques, and plan incremental functionality releases.

Communicate candidly. The difficult global economy makes it particularly important to communicate frequently and honestly with all stakeholders. Listen carefully to executives' concerns, and design creative solutions. Don't blindside your management team! Keep suppliers informed of plans and constraints. Honest communication builds loyalty and allows managers to make appropriate business plans. Remember to keep your staff informed of both good and bad news.

This recession may be deep and long. To survive, you must focus on fundamental IT principles, supported by flawless execution of basic IT functions. Leverage these turbulent times to challenge conventional wisdom and corporate inertia. Build consensus to redesign outdated business practices, kill marginal apps and services, and streamline archaic business processes. As several writers have stated, "A recession is a terrible thing to waste."

Bart Perkins is managing partner at Louisville, Ky.-based Leverage Partners Inc., which helps organizations invest well in IT. Contact him at BartPerkins@LeveragePartners.comComputerworld is an InfoWorld affiliate.

This story, "Take advantage of the recession" was originally published by Computerworld.

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