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Blog: Keep Your Friends Closer and Go On a Diet

Blog: Keep Your Friends Closer and Go On a Diet

Will the resources boom help Australia stay afloat as the economic tsunami crashes over the United States and much of the Western world?

Or will soaring interest rates and the continuing turmoil in the global economy and financial markets curb Australian consumer demand enough to force the nation into recession or at least significant slowdown? And if they do, will Australian CIOs be among the first CxOs to truly feel the pain?

With no crystal ball yet invented demonstrating much ability to provide definitive answers, wise CIOs will keep such possibilities firmly at the forefront of their minds. And they will remember Sun-Tzu's old saying from The Art of War about keeping your friends close and your enemies closer, (while perhaps reversing it) and doing everything in their power to avoid being seen as a cost centre.

For instance Australian Information Industry Association (AIIA) CEO Sheryle Moon is reminding CIOs that in a market that downturns, there is always pressure on departments seen as cost centres, which is, unfortunately, still the way the vast majority of Australian IT departments are viewed.

"I think if I was a clever CIO I'd be looking at how I manage my costs over the next couple of years and maybe taking some pre-emptive decisions around software as a service rather than bespoke applications, different ways to put new contracts together, maybe some collaborative hosting or consolidation, virtualization -- there's lots of options," Moon says. "I would be looking at what might happen if there is a general economic downturn and the effect that would have on the organization."

It's time to not only build in a bit of insurance, but to be proactive about it, Moon says.

But while the CIO would be well advised to consider such advice, he or she should proceed with care. And they may well not want to go it alone.

For instance Forrester, which in the face of "dark clouds hanging over the US economy and growing fears of a recession in 2008" has lowered its outlook for growth in US IT investment, purchases and spending in 2008, says that while economic upturns are a good time to focus on top-line growth and strategic investments, the pending downturn and increasing regulatory pressure invites companies to focus projects on operational efficiency and compliance.

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