Chris Weston, CIO Advisor at IDC, explains why Chief Information Officers must start preparing for a coronavirus slowdown today.
With the economic influence of the coronavirus starting to become clearer and the IMF predicting the most precipitous collapse in a century, it would be easy to see it coming like a rabbit in the headlights, stuck until it is too late. It would equally be easy to continue regardless, leaving the financial decisions to the Chief Financial Officer.
My advice to people running technology teams is — don’t do that! Let’s look at what we can do today, given that unless you’re working in a very special business environment a global recession will mean your CFO will be coming to see you for savings at some point in the not-too-distant future.
Nobody likes to think that their hard-won and already-too-small budget is going to be cut. And downsizing as a command from above rarely works out well — it happens too fast, it doesn’t remove the demand for the services that are costing you money, and it’s a bit like a fad diet, the weight soon comes back and eventually you realize it’s your lifestyle you have to change. Done quickly and without thought, you will end up cutting numbers as the first and most obvious target and the work will merely be redistributed amongst the survivors. This leads to lower confidence and poor potency. Then, of course, you’ll hit some problem caused by the lack of people and hire a bunch of contractors to fill this “temporary” gap, funded by some magical budget from another part of the business.
So, let’s try to avoid this situation. And the best way to do that is to show that you have a strategy before a plan is presented to you.
Costs exist for a purpose — you can’t take away the cost without removing the cause. So, what are the things your business might do to reduce expenses, what market areas are you most exposed in, and where will the hard decisions most likely come first? We need to think about preserving versatility and recognizing where your business might make cuts that can be revealed in the IT spend.
Speak to your associates, especially those in finance — they will know where the likely losses will be in terms of business activities. They may be making theories about your team and your room for maneuver that you can correct before the concrete has dried. This is a hard, emotive time, as everyone will be squabbling to keep their own team as unimpaired as possible, so working from a position of fact when the arguments begin will be crucial.
Of course, your business will have very particular situations, but the main thing is to realize that because this is coming down the path you must act now to understand what you are committing to for 2020 and beyond from service providers, outsourcers, consultants, equipment leasing, telecoms providers etcetera. They will all be very keen to tie you into multi-year deals with discounts right now. This might look charming but when the recession hits adaptability is vital. It is worth paying more to retain control. You must not allow your hands to be tied at this most crucial moment.
I’ve never been someone who remains on the negatives for too long and I’m not going to start now. There are possibilities in a slowdown, especially for the technology team. There is digital transformation work that becomes essential rather than voluntary, there are business areas that grow whilst others shrink and there are alliances to be made with suppliers and customers fighting the same battles. You will have issues in your own processes, adding time and cost that you can use this moment to tackle. These creep into the best teams, so don’t be defensive, listen to your people, and get your house in order.
Content Courtesy: Chris Weston, CIO Advisor at IDC