IT Survival Advice

How to maneuver in the down economy and prepare for a rebound.

Budget season is upon us and we struggle to make plans for next year not knowing how the current economic situation will play out.  The recent roller coaster stock market and credit crunch has the corporate world taking a hard look at spending in all areas, including IT.  As we prepare for tough times, I thought it would be worthwhile to discuss a few things to keep in mind about managing under these conditions.

A rising tide lifts all boats.  - At the danger of taking this popular economic cliché too far, we need to realize that high and low tides vary in size and don't occur at the same time at all places.  In practical terms, that means not every industry or company will be affected in the same way.  Tough economic times can be a growth period for some while many others may be severely impacted.  Structure your plans around your situation, not what's happening to others.

Don't panic. - First of all, don't panic.  Times may be tough but the sky is not falling.  As a leader, your people and other departments are looking to you to make the right choices in how to manage IT under tight economic conditions and they'll be looking to IT to help them manage their operations with fewer resources.

Hope is not a strategy. - Yes, things will get better--at some point.  However, you cannot sit back and simply wait and hope for things to get better soon.  Take advantage of your budget preparations to fully understand your costs, what it takes to run various systems and what the impacts of cuts in any particular area will be.  One of the best things you can do is to present informed alternatives.  For instance, if we cut "X" it will save this amount and here are the ramifications.

Behind every cloud is a silver lining.  - Tough economic times also present an opportunity to implement cost-saving consolidations, standardizations and legacy system shut downs.  Often, political concerns can preclude these actions.  However, in tough times political concerns are reduced as cost savings become more important.  You will still need to make your case but you may want to re-visit these options as you may find a more receptive audience now.

It's going to be a socks-and-underwear Christmas. - We spend a lot of time and effort working on new systems.  We all like the shiny new stuff,  but we will need to change our focus.  The CEO isn't really interested in talking about spending money on new systems.  Instead, we will need to focus on the basics.  This means we should focus on training our users to more fully utilize the existing systems, looking at ways of improving business processes and reducing costs, and speeding up our delivery of smaller projects aimed at reducing cost and improving efficiency.

Communicate, communicate, communicate. - Oh, did I also mention that you need to communicate?  Now more than ever, communication is critical.  Make sure that you communicate both "up" to your boss and "down" to your employees.  Make sure your boss knows and understands the actions that you are taking that they understand the ramifications of IT actions so they can make informed decisions.  Also make sure you take time to learn their plans so the actions you take are consistent with the overall plans -- you don't want to "zig" when everyone else "zags."

And remember to be as open as you can be with your employees.  They understand the situation and are anxious and want to know what is going on.  You may also want to include your people in the planning process.  They can be an invaluable source of ideas, alternative solutions and knowledge of the inner workings of the company.

"It's not a question of whether you can, the fact is you will."  - This quote is from an interview with Nevada State Treasurer, Kate Marshall talking about how they are handling the economic downturn.  I liked it because it truly sums up how you get through these situations.  Like it or not, you will do what you have to do.  Cutting back 5% or 10% seems difficult (and it is) and larger cuts just don't seem possible.  However, you need to be prepared to cut deeply if needed because if you can't someone else will make those decisions for you and it quite possibly may be someone not as well informed about IT as you.

In the oil business downturn of the 80's I had to manage cutting staff and services by 70%.  No that's not a typo.  It really is 70% and it really is by 70%, not to 70%.  It was one of the most difficult periods in my professional life.  But like all the other managers in the company you have to make the hard decisions sometimes to help the company survive.  I don't expect things to get this bad again but it helps if you break the paradigm of thinking that the way you've been operating is the only way you can operate.

This too shall pass. - The good news is that tough times won't last forever, at some point things will get better.  But also keep in mind that when it does "pass" you may need to make a very quick shift from cost reduction mode to suddenly working on new projects.  Companies will monitor the conditions and be cautious about shifting their plans, but when they do decide to shift they will do it quickly and will expect you to be able to react quickly too.

We've all got a tough challenge in front of us but it is one that we can manage with thoughtful planning and decisive action.

"Coins" photo by Darren Hester

This article is also posted on Forbes.com.  Feel free to join in the discussion either on this site or at Forbes.com

If this topic was of interest, you might also like these:

• CIO Job Description And The Need For Technical Experience
• The IT Budget Shuffle
• How's Your Rain Dancing?
• Or the posts in the "Strategy & Management"  category.

Comments

[Terrence Seamon]

Great entry, Mike. Much needed, and not just by IT folks.
I'll be sharing this one with others today.
Thanks
Terry

[Mike]

Terry,

Thanks for stopping by. I'm glad you liked it. As you say much of this applies outside of IT also.

Mike

[Ralph Wilson]

Mike,

The quote that struck me was "It's not a question of whether you can, the fact is you will."

While it may be well and good to declare that "It will be done! PERIOD!", in truth, the person doing the declaration often has no idea as to a) whether it can be done, b) whether it can be done in the given time frame, or c) the implications of it being done.

For instance, it may be technically possible to put 14 databases on one server in order to "handle the load with what we already have" but that may not be possible given that a) we can't add any disc space to the system, b) it is supposed to be accomplished between 17:00 tonight and 06:00 tomorrow morning, and c) the consolidation is being done from 5 servers that are already running at 85% of the CPU capacity and you are demanding equivalent performance for all databases compared to what they currently provide.

It also may not be possible to accomplish the same work with 30% of the staff and, all too often, only about 15% of the work being done in a "good year" is new development. That means that 85% of the work being done is maintenance (either unscheduled or scheduled) that keeps everything humming as smoothly as possible. Whether it is a "little" format change in a report or a "minor" change to the way data is received or processed, if you have 30% of the staff that you did have, then right at 65% (i.e. [100 - ((30 / 85) * 100] ) of the maintenance is not going to get done unless you start working the 30% longer . . . and that has other problems.

I will agree that these are going to be hard times (the country song "Hard Candy Christmas" comes to mind) and I have to agree that there will be corporate adjustments that may well declare that IT will cut its staff by 50% and simply not reduce its level of support for the organization . . . PERIOD! I have seen that attitude far too often and I have also seen it work . . . for a little while. Unfortunately, it all too often resembles butchering the cow rather than milking it and then wondering why, when the meat is gone, you don't have something to eat. All too often, modern businesses simply don't realize that IT is not really an expense but, rather, a means of making a profit and, as a result, it is only after IT has been decimated that they realize what they have done.

As for management keeping the IT staff in the loop . . . well, historic evidence does not provide much hope for that. Typically, IT management is too afraid that if they let the IT staff know what the true conditions are and what the options are, the IT staff will update their resumes and start looking; therefore, IT management usually decides that it is better to keep the staff in the dark and "only tell them what they need to know . . . which is, basically, nothing."

[Mike]

Ralph,

As always, thanks for commenting. For me the heart of that quote is change our reality -- we can't imagine cutting a system or reducing service but the reality is we can if truly necessary. That's not to say there won't be corresponding impacts, there will. And sometimes we can get creative and find some mitagating actions. Part of our job is to let people know the impacts and make informed decisions.

There is validity to your comment about managment keeping IT in the loop. However, if they won't talk to us maybe we should initiate the discussion. Let's suggest possible cost reductions that can be done in an orderly way before they make decisions without involving us.

Mike