By Naked CIO, 3 March 2008 12:38
COMMENT
With spring and recession in the air, a CEO's fancy turns to pruning costs - and for the Naked CIO's department that means job cuts. He is already under-resourced, so what should he do?
Over my morning coffee I review the latest satisfaction statistics for my department's services. There are some snide comments on responsiveness and complaints about the time it takes to get things done.
If you're like me, you've been playing catch-up in your IT department for years. The company's growth and its demands on IT always outstrip our resources.
Now with a recession looming, there is a drive to lower costs. That means reducing headcount and being exceptionally frugal in meeting existing business needs.
So I start reviewing an organisational structure that is already ill-prepared to meet existing business requirements. Which part of the leaky pipework can possibly sustain a cut?
Funnily, after I exclude certain employees - we don't want to upset the fine legal minds in the HR department - I am left with exceedingly few options.
It disturbs me that I might consider excluding certain people from consideration because of sex, race or age. Correct me if I am wrong but isn't the whole point of equal opportunity to exclude decisions based on exactly this premise?
But what frustrates me more is that to the business my department is nothing more than a financial rubric on some monthly report that gets red-circled as a key area for cost reduction.
It doesn't matter that payroll represents more than 80 per cent of my annual operational costs. Cost reduction means job losses.
It appears to me that IT is about two years behind the business in terms of resources-to-growth models. So shouldn't we wait two years before cutting IT costs?
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Business alignment is a fallacy. Organisations do not want business alignment of IT because if it were achieved they would have to look beyond cost and really examine IT's potential for the business.
So despite pressure to improve services, decrease downtime, deliver new and increasingly ambitious projects that define forward-thinking technology, my priority is now to save an easy million - oh, and still improve services.
As a CIO I want to innovate, expand the company's appetite for creative and new ways of managing traditional enterprise problems.
IT has a unique perspective that comes from seeing the whole business and how technology can integrate practices and business departments.
The whole exercise seems circular to me. IT is seen as a poor producer because of limited resources. CEOs want to cut costs from poor producers. This exacerbates the problem.
If my business really wants to handle the fears of recession the best way to do it is to increase IT's operational budget by 100 per cent. That increase would allow us to develop systems to increase productivity and cut costs by twice that additional operational cost within 24 months.
I can prove this - my problem is no one wants to listen. So all I can do is admit that as a CIO I'm not an innovator - just a bean-counter.
Comments
There are 7 comments. Join the discussion
1. Richard
CEO whinges about "skills crisis"; orders CIO to fire skilled staff!
What does this tell us about politicians, industry lobby groups, eSkills, HR experts etc?
Crisis: What "skills crisis"?
Career: What IT career?
2. anonymous
Been there and the solution is to tell the real bean-counters, the accountants, that when they cut roles in their area you will do likewise. They will respond with, "It is impossible to cut in our area we are running on empty as it is", which is when you smile and say "Snap."
And then drive it home by telling them that if any IT roles are cut the computer service will not degrade gracefully, it will just stop and even they will not be able to do their jobs. Another area ripe for this treatment is senior managers - have you noticed how they never get chopped?
3. Kevin Parker
I read this article with interest, as an ex CIO and IT director. It assumes we are all victims of the organisation's destiny, and with that approach the IT function deserves everything it gets.
The challenge is to re-examine IT's purpose within your organisation and start from that point to think creatively to achieve the best performance possible within the value your company puts on you - this is alignment.
4. Austin Holdsworth
Sometimes innovation requires the CIO to be bold enough to stick their head above the parapet and take risks.
Maybe it's time to look at open source as a alternative to costly proprietory offerings. Significant savings could made. Certainly enough to justify the salaries of two or three IT skilled staff.
How much did that CRM/MIS system cost? Maybe an open source CRM/MIS system could have been used?
Try and see through the FUD created around open source and you may find that open source skills, attained through retraining and though recruitment may not be as expensive as you were lead to believe. They may even come cheaper.
5. anonymous
Hundreds share your pain. Is the solution not to put your own case to senior management for how spend to save with initiatives that can make a real and sustaining difference?
That's got to be better than a resigned shrug of the shoulders - and actively building your own coffin.
6. Karen Challinor
So how do you intend to deal with this problem?
As you say, you are a fledgling CIO and you have legacy problems you need to deal with. That is fairly common to anyone becoming a CIO - we all recognise your predicament.
What we want to see is how you progress from fledgling to effortless soaring, as this may actually help others in similar situations.
So by all means outline your pet problem of the week but then please show us that you have ways to deal with it.
7. Stuart Fawcett
IT in larger organisations should rarely be a seen as a single entity, rather it should reflect the areas where it is used.
If business areas were buying IT services and valuing their contribution then the cuts could be viewed in a clearer light; Sales spend 10Kpa on IT for services and makes 400K of value from these services, if they only spent 5K then they would only get 100K of value.