The economy surely will affect the way we all do business for the next six months or more. You still may have some discretionary IT budget left in the fourth quarter of calendar year 2008, but I seriously doubt there will be any excess funds in the first quarter of 2009. In fact, drastic reductions in corporate spending are a certainty for the foreseeable future. That means IT budgets will be slashed–even for those few organizations that have so far not seen a decline in revenues. Information technology is a service–not a profit center–and even necessary services such as IT will be expected to reduce spending to help maintain corporate profitability or, perhaps, corporate viability. Bailout funds are quickly drying up. Those organizations that weather the storm are going to do some serious belt tightening.

Get Smart

Sounds scary, and it should. But it is not a signal for corporate IT to go into maintenance mode or survival mode. This should be a time for corporate IT to reorganize, reprioritize, and plan for the future. Business cycles come and go, and the best IT departments will be those that have readied themselves for the future–not those that have hunkered down and buried their head in the sand. Use this time to go into smart mode. Create efficiencies that will make your IT organization even better when the current crisis passes.

IT departments have become fat, dumb, and happy. While there always are certain individuals in any IT shop who are overachievers, the vast majority of individuals find a nice, comfy niche where they get their assigned tasks done without having to work all that hard. Over the course of the past few years, IT has lost that sense of urgency–of always striving for excellence. Corporate IT shops have become siloed, composed of multiple little fiefdoms. You have the infrastructure group and the network group and the application management group and the application development group and the database group–it goes on forever.

When something goes wrong, each group figures out ways to blame the others. When something needs to be done, each group tries to figure out ways to do as little work as possible. The whole concept of teamwork is gone. Doing anything complex such as starting up a new enterprise application has become extremely difficult as each group works to further its own goals rather than working to better the organization. Maybe now is the time to start thinking about getting lean and mean and efficient.

Peter and Paula

When was the last time you really assessed your staff? If someone has been with the company 20 years and is a mid-level manager, there probably is a good reason that person is stuck on that rung of the corporate ladder. The Peter (and Paula) principle is very real. Don't ignore the obvious. How about that nontechnical manager running a technical staff? Is that really the right way to do things? While IT does need to understand business, it is at heart technology, and people who manage technology staff had better understand technology. You wouldn't expect someone with a regional school "executive MBA" to be successful managing a baseball team. Why do we expect someone will be any more successful managing a technology group?

Let's use this time of budget reductions to assess how best to organize our staffs. The blessing of this economy is there is a plethora of well-qualified technical IT folks looking for work. Why not cherry-pick the employers' market right now and upgrade your staff? It may not make you very popular initially, but if it improves the overall quality and efficiency of IT, then the end result is a better corporate life for everyone. When Jack Welsh was running GE, he often was criticized for removing the nonperformers from the organization. It seemed cruel and unnecessary to RIF (reduction in force) routinely the bottom 10 percent based on performance reviews. But you know and I know it worked. Running a business isn't like running a government–the bottom line is the ultimate arbiter of what is right and fair. Better staffs make for more efficiency.

Let's Have FUN!

There is another phenomenon I have observed. I call this the "feel good" phenomenon. We have become obsessed with making workplaces "fun." We sponsor departmental bonding sessions. We schedule special off-site meetings so everyone can get to know their peers. We sponsor activities to give back to the community. Now, all this is fine and nice–but what value does it really add to the organization? I personally am involved in a number of organizations that help people less fortunate than I am–but I do it on my own time. I don't expect to be compensated for doing what is essentially part of being human.

I have seen entire IT departments take off a full day of work to go to some social function in the middle of an important project. I have seen individuals with overdue deliverables take time off to do community work. Call me old-fashioned–but my staff is paid to work, and that is what I expect the staff to do. There will be a glut of information technology workers for the foreseeable future. I suggest hiring people who enjoy IT work and do not need to be coerced into liking it. I suggest making the environment more "fun" by making it a challenging and rewarding place to work–not by creating artificial "fun" events.

No Upgrades?

Your planned server upgrades have been placed on an indefinite hold as have software refreshes. You are going to be stuck with the current base infrastructure for at least the next year. This also provides you with opportunities. The staff time that would have been allocated to building out new servers and configuring new software can be repurposed in a number of ways.

One thing corporate IT never seems to have enough time for is planning. Use this time to start planning for the future with your business partners. Take the time to meet with each of your customers. Sit down with each business unit and discover what its biggest pain points are. Perform some traditional systems analyses. Walk through each unit's business processes and suggest solutions. Begin to gather requirements and create specifications for solutions to the issues you have discovered. Requirements gathering always gets short-circuited–it seems halfway through a development cycle, requirements still are being refined. Use this time to define requirements fully for those projects that will occur when funding becomes available. Not only does this process allow you to be ready to move when the opportunity arises, it also establishes your credibility as a trusted advisor to the business units.

Start attacking problems that cross all business units. Meet with business owners to begin an intellectual property assessment. Start cleaning up all the gigabytes of file shares in preparation for moving to an enterprise content management system or collaboration system. If you already are using an ECM, then do the same thing in that system. Corporate data is the heart of any organization, but it must be secure, searchable, and easily accessible for it to be of any value. Lead your organization in archiving data no longer needed and properly classifying and categorizing what remains. Teach your customers the value of metadata. Build search strategies based on that metadata. Even if you currently are not able to purchase the new enterprise search software and servers you need, you can begin to lay the foundation to make that software more valuable when it is acquired. Assigning and attaching meta-data to data is one of those things that never seem to get done. Maybe you can use your smart time to get business units working on this often ignored process.

And what about those server upgrades that have been deferred? Just because they aren't going to happen next quarter doesn't mean you can't make preparations for the upgrade. Maybe you are not only moving to better hardware and a new operating system but also are making the transition to a 64-bit operating system. You know that is going to cause some problems. Those old legacy 16-bit server helper applications are not going to run on your new systems. Take time to find new solutions. Likewise inventory your existing applications. Do you still have some fat-client applications that really need to go? Are you running a version or two behind on your Web services applications? Even if you don't have the resources available right now to rewrite them, you can at least create a plan for replacing them. Review the documentation (or create the documentation, if necessary), and get it in such a state it could be outsourced or offshored. Any custom application always should be fully documented and specified so any competent developer or group of developers could recreate it from the existing documentation.

While you are reviewing your existing servers, create a current-state document for each one. Map that to a future state document for your new servers. You may find some parts of your current state are of no value and can be eliminated now. Review operating and error logs. Look for existing bottlenecks. You may find efficiencies can be gained through relatively inexpensive upgrades of things such as RAM or IO devices. Seek out all inefficiencies and find solutions.

Look Outside the Organization

So far we have focused on looking internally to try to find bright spots in the current environment. Don't forget to look externally. Your vendors are feeling a crunch, too. This would be a very good time to start feeding them specifications on what you will be looking to purchase when you have the opportunity. Shop those specs around. When IT budgets are limited, it becomes a buyer's market–just like it is an employer's market for IT talent. Take advantage of this market. You will find vendors that didn't even have time for you before now are finding they really want your business. Provide multiple vendors your needs and have them periodically update their quotes on those needs. The longer the recession continues, the better those quotes are going to get.

The same strategy works for your external work and consulting. IT consulting firms are going to be forced to divest themselves of their mid-level and below performers–keeping only their top consultants. Those top-tier consultants are not cheap, however, and consulting firms are going to be willing to provide deep discounts to keep them busy. That provides you, the customer, with a twofold benefit: Not only are you able to outsource services at a reduced cost, but you just may get superior talent for those lower costs.

The Bottom Line

We are in a recession, and that recession is not likely to go away soon. These are tough times. But tough times do not mean we need to stop innovating. The best IT leaders will take these tough times and make them smart times. The decisions you need to make are not easy. Reorganizing staff and letting people go are difficult–but it may be necessary. Use this time wisely to examine every facet of corporate IT. Bunker mentality is for losers. Become an innovator in a harsh economic climate and you will become a winner–both now and in the future when the pendulum swings to the other side of its arc.

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Bad Times = Big Opportunities

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