Weathering the Storm
- From CIO Digest, July 2009 Issue ( Download This Entire Issue in PDF)
Many saw the dark clouds coming, but few predicted it would be this bad. In the past nine months, we’ve witnessed a “perfect storm” of a global recession: an unprecedented mortgage crisis and Wall Street bailout in the United States, widespread layoffs, a tightening of credit after years of relatively free-flowing loans, and bursting housing bubbles on both sides of the Atlantic.
IT leaders are used to having to do more with less. But now they have to do more with a lot less.
Make no mistake, however: no matter what industry you’re in, this recession could be the opportunity of your career.
The business needs you–now more than ever
Over the past decade, the image of the CIO as “head geek” focused on solving technology problems has transformed to a much more business-oriented, strategic role. Many organizations have divided their IT leadership roles into chief technology officer and chief information officer, keeping the latter focused on leveraging information to transform the business.
Unfortunately, business leaders’ perceptions of what CIOs can bring to the table have not evolved in step with the maturing role of IT leadership. According to a report by Forrester Research, most CEOs still don’t view IT as a proactive source for technology-based business innovation. However, emerging business technology is creating a greater demand for CIOs who are capable of driving business results.1
Now is the time for CIOs to stand up as partners, deliver solutions that can help the business through the downturn, and build credibility that they can leverage in better times.
“It’s during difficult times that you make your reputation,” says Jay Shankavaram, managing director of the Corporate Executive Board, a global, cross-industry research association focused on executive decision support. “This recession is a golden opportunity for IT leaders to shift the perception of the IT function, because they have the business partners’ attention. And the business partners may be more willing to actually think outside the box and consider different options than might normally be the case.”
But thinking outside the box doesn’t mean they want to spend money on IT, unless you can show them in no uncertain terms that they’ll see that money back—and quickly.
Making IT pay for itself
Indeed, most organizations are now requiring IT solutions to deliver much faster return on investment (ROI) than in the past, and IT leaders are tasked with conducting and communicating credible ROI analyses. It’s the “credible” part that CIOs have to pay special attention to, says Stanley King, president and CEO of The Alchemy Solutions Group, an Atlanta-based research firm that studies the operational and economic impact of IT solutions.
“ROI as a term has been cheapened by vendors and resellers making outrageous claims that they can’t back up,” he says. “CIOs have a right to demand sound, financially based answers from their technology partners. Meeting a budget is an important part of a CIO’s job, and that accountability is magnified during a recession. CIOs need to look for technology providers who can provide them with the business case they need to justify the budget in the first place. Defining the anticipated business value will not only justify the expense but help decide which solutions are given the highest priority. If you’re asking a vendor a financial question and getting a technical response, that should be a warning sign.”
To Greg Topf, director of IT at NewBay Media, a New York Citybased publisher of Guitar Player and other popular consumer magazines and Websites, this is a familiar challenge. “I’ve turned down a number of solutions with aggressive ROI promises because I knew that’s all they were,” he says. “These days, I need to know up front that a solution can truly deliver ROI within two years. And if it can’t, I don’t even bother with it. I’ve established a great deal of trust with the business, and I need to know that I’m being honest with them about the benefits IT solutions can deliver, and the timeframe in which we’ll start seeing results.”
One area where companies can often reap significant gains quickly is by optimizing storage—either by increasing utilization through storage virtualization or by freeing up primary storage capacity through archiving or storage tiering. (See “Get Your Money Out of Storage” in this issue.)
Topf identified NewBay Media’s file shares as a prime opportunity for storage tiering. He recently implemented Symantec Enterprise Vault with File System Archiving, which has already paid for itself in tape cost avoidance alone. “I realized that 85 percent of the data on our file servers hadn’t been touched in a year and a half,” he recalls. “By archiving that data onto second-tier storage using Enterprise Vault, I was able to free up a lot of primary storage and eliminate most of our tape backups.”
Channel your inner insurance salesman
Sometimes, however, ROI isn’t the point. Especially with data protection and security, bulletproof solutions simply have to be in place—during good times and bad—or businesses face unacceptable exposure to risks.
“Sell those investments to the business as you’d sell insurance,” advises Kam Golpariani, vice president, security operations, security risk management at First Advantage Corporation. “Often it’s not possible or appropriate to build an ROI case—you have to explain the need in terms of risk avoidance. Paint an accurate picture, without being overly dramatic, of what a worst-case scenario would look like if the business didn’t have certain IT solutions in place.”
As a provider of risk management services, First Advantage understands that organizations must continue to manage risk very carefully during a recession. To mitigate the risk of sensitive internal or customer data leaks, the company recently deployed Symantec Data Loss Prevention.
“We do a lot of executive reporting, and we were able to show business managers what the solution could accomplish using non-technical terms,” says Golpariani. “Communication is the most important thing. Listen to what they want and establish a two-way dialog. In our case, business managers don’t want certain data leaving the organization under any circumstances, and if it does, they want to know about it immediately. We were able to attach a value to that risk, and show them that the solution was justified.”
Adds King from The Alchemy Solutions Group: “Business decision makers should only care about the operational or economic impact of IT solutions. They should view solutions in terms of business value and look for customer references in similar industries.”
Getting time on your side
Ask a business manager to name a few frustrations with IT, and the time it takes to complete projects will likely come up. So might the number of employees dedicated to keeping the systems running. Both have recently come under more intense scrutiny.
“IT organizations are being asked to compress the entire cycle, from the idea to the implementation to delivering the benefit to the business,” observes Oliver Hoffmann, CEO of LVR-InfoKom, the IT services arm of the Rhineland Regional Council (LVR), Germany’s largest provider of services for the disabled.
One of the ways LVR-InfoKom is enabling its staff to accomplish more in less time is through continuous product and process standardization. For example, by standardizing on Symantec Endpoint Protection and Veritas NetBackup to manage two notoriously time-consuming areas—endpoint security and data protection—each from a single console, LVR is saving a significant amount of staff time.
“If our staff had to manage endpoint protection without a central management console, or use multiple tools to manage backup and recovery, they would be much less efficient,” says Dr. Christian Hermann, head of infrastructure at LVR-InfoKom. “Even more important, standardization almost always makes for a more effective solution.”
KPIT Cummins, a business services provider based in Pune, India, is taking a similar path, identifying tools that are “time burglars” and replacing them with solutions that are easier to deploy and manage. “With our previous antivirus solution, we had to maintain a separate master server to host the software for each of our seven domains,” explains Mandar Marulkar, chief information security officer at KPIT Cummins. “We moved to Symantec Endpoint Protection, which requires only one central server, and reclaimed 80 percent of one system administrator’s time.”
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Technology triage: choosing projects wisely
Even after vetting technology investments based on ROI, risk avoidance, and staff time savings, some projects will inevitably have to wait until an economic recovery is at hand. Prioritizing is difficult, and politics often come into play.
“We’re deploying a new Cisco Unified Messaging system, which is a big investment for a company that right now is watching every penny,” says NewBay Media’s Topf. “Our employees might justifiably ask, ‘Why are you getting all those boxes with the Cisco logo? We just had to lay somebody off.’ But we did our homework, so we can confidently say, ‘Hey, this is going to pay for itself. We’re going to be able to pick up the phone in any office—or from a home user’s office—dial a four-digit extension and get anyone in any other office without incurring long-distance fees. It would be silly not to do it.”
Topf felt differently about another project involving network accelerators. “I thought they’d pay for themselves in six to eight months, so I worked out a try-andbuy program with the vendor,” he says. “After measuring the results, the impact wasn’t what I had expected. Even though it would have been nice to have kept the accelerators, I ended up returning them, because I knew we could put that money to better use.”
KPIT Cummins has also decided to move forward with unified messaging, citing similar benefits and cost savings. The company is aggressively pursuing server consolidation through virtualization, as well as improving its asset management processes to save time and reduce software license costs. “We’re selecting investments that allow us to make more optimal use of our existing infrastructure and improve processes,” says Marulkar. “This is allowing us to reduce costs for our customers, because they are also feeling the heat of this recession.”
Rethinking the future
The current economic climate won’t last forever. But the way IT leaders respond to it will leave a lasting impression on their colleagues and business partners. “The challenge for IT is to position itself as a strategic asset that can help drive business outcomes and prepare companies for new directions,” says the Corporate Executive Board’s Shankavaram. “Because a lot of organizations are rethinking the way they’re planning to grow. They’re going back to their drawing boards. And IT leaders have the opportunity to help lead this transformation.”
For CIOs who’ve struggled for years to be taken seriously as true business partners, the drawing board may not be such a bad place to be.
1 Bobby Cameron, “CI Os: Avoid IT Marginalization on the Path to BT : CI Os Settling for Operational Maturity Must Strive for IT Excellence,” Forrester Research, July 2007.
Ken Downie is senior writer at NAVAJO Company. His work has appeared in Business Finance, Internet World, and Business Credit magazines.