Writing Winning IT Plans in a Recession

They do not want to see your IT plan. Trust us, they don’t. Up in the C-suite, the CFO, CEO, and the board chairman are way too busy ducking pot shots from the Obama White House; conjuring up creative explanations of down quarters to pacify shareholders; and reading economic tea leaves in hopes that there is some sliver of near term good news. As for an IT plan, to them, it’s just more overhead at a time when they are struggling to keep their own heads above water.

But you have to prepare a plan. Changing competitive conditions, dwindling budgets, and new technological possibilities are coming together in ways that demand the C-suite be clued into tomorrow’s IT realities and this perfect storm is prompting many CIOs to craft IT plans that stay sensitive to the down economy but also put forth new, compelling and innovative IT initiatives.

How?, you ask. Know that you definitely need a strategy before shuffling another IT plan to the high floors. Understand, too, it won’t be easy.

Chris Steel with PA Consulting Group’s IT Consulting practice points out that for five years most IT managers have been under the gun to cut costs, so there’s not a lot of fat to trim. “You have to step out of that mindset and look instead for places to innovate. Pick yourself up and out of the box of thinking about cost controls and start thinking differently, said Steel.

“Many CIOs are plainly frustrated. They feel they’ve driven out so much cost but ‘Here we go again’. We see the situation differently. We see this time as a tremendous opportunity to impress the C-suite with the value of good IT thinking.”

There’s the tasty carrot―do this smartly and, promises Steel, it’s a fast way to impress the higher-ups that you genuinely get what the business is about and, for any CIO, that has become Job One.

Now digest the single most common blunder IT managers are making with their 2009 plans: “They make across the board cuts,” said Scott Feuless, a senior consultant at Compass. That kind of clueless cutting simply is obtuse. The alternative is to really eyeball the budget lines and cut where the pains are least. Some IT areas offer fertile opportunities for intelligent cost-savings―data centers, for instance. Other IT spends probably can now be delayed. Cloud computing initiatives in some companies are outlays that may be deferred with little short term negative impacts. But still other initiatives―data security, for example―just might need more budget.

Every company will come up with its own spending hierarchy, concedes Feuless, but his big point is that budgets need fine-tuning line by line. That’s how to keep the IT mission in focus. “Don’t just slash and burn. Honestly look for places to operate more efficiently.”

The related, big mistake made by IT managers facing needs for sharp cuts is that they rush into an outsourcing deal to achieve quick savings, warns Feuless. Yes, in Year One, the companies that go this route can point to double-digit savings, but “by Year Five they are getting raped. Outsourcing companies know that they win by delivering short-term savings,” said Feuless and they build their profits into the back end.

It’s up to the savvy IT manager to safeguard the company’s longer-term savings and that means recognizing that outsourcing is not always the shrewdest move and when it does make sense carefully analyze the year by year outlays to be sure there will be consistent savings over the life of the contract, said Feuless.

So, what else should you be doing in a plan that wows the C-suite? Look for places to practice guerilla IT, urges Steel. This means hunting for blatant problems that nonetheless lend themselves to quick, efficient, and inexpensive solutions. Highlight a few of these in any recession-sensitive plan and the “suits” will take notice because it is problems getting solved.

Next, suggests Steel, is show flexibility about spreading larger IT outlays over several years. IT traditionally has dug in its heels―“We need to do this fast.”―but, said Steel, he is seeing far faster approval for programs that extend the dollar outlay over two, three, possibly more years.

The last, crucial step in building a winning IT plan, said Mark Stoecklein, senior director in the Technology Solutions Practice at SunGard Availability Services, is to tie every new expenditure back to provable returns. “ROI is the big driver today. You can spend money if it will save you money or make you money and CFOs will double-check your claims.”

“Everything in today’s IT planning begins and ends with numbers,” adds John Baschab, co-author of The Executive’s Guide to Information Technology. “You cannot start a plan with the technology. Not today. Start with the numbers, end with the numbers and know that is exactly what the C-suite wants.”