TotalCIO

Mar 5 2009   2:34PM GMT

IT transformation is off the table in a recession, CIOs say



Posted by: Linda Tucci
Tags:
IT/business management
Recession

How much pressure are CIOs feeling to deliver the proverbial more with less? At a lunch yesterday of IT and business executives in Madison, Wis., the strain was palpable. So was a creeping weariness with the do-more-with-less strategy that’s been the boast of every hotshot CIO since IT’s own economic Armageddon of 2001-2003. It’s one thing, it seems, to do more with less when there’s money in the banks, or drive IT transformation when business goals aren’t a moving target.

“Why are people at my door asking for more work, when I have less dollars to do it?” asked David Cagigal, CIO for Alliant Energy Corp. “Some of the customers just don’t get it.”

The lunch was an invitation-only precursor to the Fusion 2009 CEO-CIO Symposium put on by the Wisconsin Technology Network. Cagigal was responding to the lunchtime talk given by Ajei Gopal, executive VP for CA Inc.’s products and technology group. Gopal gave a progress report on his company’s reorganization since the scandal-ridden days before former chairman and CEO Sanjay Kumar went to jail for improprieties related to his job, and to deliver the message that now is the time for bold action. While it may be seductive to stop spending, CIOs should be investing in long-term strategies that break down information technology silos and weave IT into every aspect of the business so that CIOs see what they need to see and respond appropriately to provide the business with (ready for the next proverbial?) end-to-end IT services.

In CA’s case, the internal strategy is not so much on gee-whiz technology, he said, but in tying technology together in innovative and novel ways to serve the customer. Moreover, Gopal predicted that in the vendor world, the integrators — not the point-solution companies — will prevail when the upturn comes because customers, too, will be looking for end-to-end solutions. (Unless, Gopal, they don’t work.)

The spiel was met with some pushback. Alliant’s Cagigal pointed out that CA was ahead of the curve, fortunate to have reinvested in its technology strategy before the crash. How do you convey the need to optimize the business now?

Another CIO observed that IT transformation is a good deal easier at a company whose business is technology than at an organization such as hers — the Wisconsin Department of Children and Families. “The challenge I have as a CIO is to try to help translate the investment of IT to the mission of the agency,” she said, to bosses who don’t understand IT well enough to appreciate the argument. If money becomes available, the agency’s instinct is to hire more social workers rather than sort through how IT could make the current workforce more efficient. (And when the need is urgent, who’s to blame them, as IT transformation doesn’t happen overnight.)

Frank Ace, CIO of the Wisconsin Department of Justice (DOJ), echoed that sentiment. For the DOJ, getting more law enforcement on the street will always be more important than adding another MB. Frank said that IT may be a victim of its own brag: The industry does promote IT as the tool that can help organizations to do more with less. And now CIOs may be caught in a trap of their own making. The cost of IT has slipped down the list of priorities for many organizations.

If you follow the trend of doing more with less, eventually you’ll do everything with nothing. IT’s a slippery slope, Gopal agreed.

“The positioning of the value of an incremental dollar spend in IT versus on something that might be seen as the first line of defense, whether it is cops on the street or social workers, is difficult.”

But it is a case that has to be made on value, Gopal said. “That is the conversion you have to make. You can’t talk about a Unix administrator, but the outcome of having that Unix administrator.”

And what happens when the recession basically turns business goals upside down? One audience member wanted to know what happens to IT shops that, like CA, forged a long-term strategy to meet business goals, when those goals no longer exist? The market trend upon which the IT investment is predicated is no longer viable.

The question was met with a kind of grim silence from Gopal and the audience — a reminder of how cataclysmic this recession has already been for some companies.

This being the Midwest, the hand-wringing did not go on too long without a rejoinder. An IT executive with Kohler Co. admonished the audience not to whine. CIOs are working themselves into a lather about cost reductions, but everybody across the company is feeling the pain. And the worst thing IT could do now is single itself out as a victim. “You will generate a lot of resentment among other staff,” he said.

4  Comments on this Post

 
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  • MikeRollingsBG
    Linda -- Right title for the wrong reasons. If we define IT Transformation as an IT driven activity then I would agree -- IT organizations are not going to get more funding to do something solely on the premise of transforming one cog in a machine that needs to be redesigned. However, if we define transformation as IT transformation directed by business transformation, then IT transformation is as relevant as manufacturing, marketing, sales, and other departmental transformations required to fulfill a business transformation. When did we give up on real transformation and adopt a definition of incremental improvement masquerading as transformation? We need transformation in a down economy. Read more at our Executive Advisory Program blog http://eapblog.burtongroup.com/executive_advisory_progra/2009/03/transforming-it.html Michael Rollings Senior Analyst, Executive Advisory Program Burton Group
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  • MikeRollingsBG
    A usable link to Burton Group's Executive Advisory Blog: [A href="http://eapblog.burtongroup.com/executive_advisory_progra/2009/03/transforming-it.html"] Michael Rollings Senior Analyst, Executive Advisory Program Burton Group
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  • Robdscmppm
    Linda, I agree with what Mike is saying. I just came away from PMI SFO all day conference on the subject of Project Management and PPM value and how it is tied to strategy. The actual great companies and people who do get it, unlike Mr. Cagigal, is that now is the time for IT transformation. The business goals have not been turned upside down, business goals are still to make profit, innovate and beat your competition. The smart and great companies are using this downturn to "change business process" and leverage the "IT architecture of today" through IT transformation tied to a strategy and coming out of the downturn will accelerate at a much faster rate then those who did not. I suspect Mr. Gopal, as I see in your bio did not clearly convey that "the business strategy" must be translated into a Business Architecture by Business Architects (not IT Infrastructure, not IT apps nor IT Data Architects) and create a roadmap that builds scalability into the leveraging of a IT Transformation. It is "not" IT Strategy of using technology to try and drive business where the "business process" cannot support it or the personnel will act as the barrier. This is why a Program of Strategic Projects tied to a Business Strategy can and will work in a IT Transformation and the winners will be doing it now.
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  • MikeRollingsBG
    On a related note, I had a recent conversation about Business Synchronization and whether it was the same as Alignment. Synchronization is not alignment. The need for alignment flows from the idea that you have two diverging paths that need to be converged. Synchronization is the creation of a common path. It means an end to the business and IT divide by working together and looking for integrated movement and forward momentum. Synchronization and the planning discipline for business optimization are fundamental to transformation. Michael Rollings Senior Analyst, Executive Advisory Program Burton Group Read more in our Executive Advisory Blog: [A href="http://eapblog.burtongroup.com/executive_advisory_progra/2009/03/transformation-businessit-alignment-is-not-synchronization-.html"]Transformation - Business/IT Alignment is not Synchronization[/A]
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