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Quo Vadis?

Quo Vadis?

Even in tough times, IT management means more than keeping the lights on.

In a recent discussion with a Melbourne-based CIO I heard a novel word for describing IT management in these difficult times. The CIO worked for a leading Australian manufacturing company. It had been a tough year. The competitive environment had changed dramatically and the long-term survival of his organisation was not even assured. He was working in a climate where the emphasis was on cost reduction. I asked him what was his biggest challenge. His response was sustainability.

He said sustainability represented a border. On one side was the ability of the IS operation to deliver benefit to the business. On the other side was being under-resourced and in a constant state of crises where the best IS could deliver was to keep the lights on, and even that wasn't guaranteed. The challenge this CIO faced was explaining to his business counterparts that cost reduction could only go so far - at some point the fundamental fabric of the business could not be sustained.

He illustrated his argument with a staffing example. In a manufacturing company, especially one that was financially challenged, sales order processing is a key activity. If done swiftly, orders are dispatched complete with invoices, and cash flow is accelerated. However, the business analyst responsible for this process was leaving, and with a hiring freeze, he could not be replaced. How would the company manage without this person? From the CIO's expression, I could see that this was uncharted waters where a wing and a prayer were likely to be in great demand.

Interestingly, this CIO did see the recent recession cloud as having a silver lining: he wasn't losing staff because alternative IT positions were in short supply. He wondered how he would retain staff if the IT jobs market started to pick up.

I believe the CIO had articulated what is probably the biggest frustration I encounter among IS executives. Everyone in business these days seems to be penny-wise and pound foolish. No one seems to acknowledge that there are minimum levels of resources required to perform tasks. In the US, 70 per cent of respondents to a recent InfoWorld study indicated that IT was absolutely essential to the business. What will be the impact if the IS department cannot fully perform its work?

If you agree that an outlay on IS is an investment in the potential of operational efficiency, then it follows that a lack of expenditure on IT is a tolerance of operational inefficiency. Like the Melbourne manufacturing company, financial health will not be achieved by being inefficient. In the end, the way a business grows is by securing and retaining customers. Customers want service; service requires processes; and, processes require resources to be sustainable.

After a decade of cost-cutting perhaps more companies should be trying, like this CIO in Melbourne, to determine what are the boundaries of their sustainability.

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