The current economic climate can be summed up in a word: unpredictable. Organizations need to be cautious, balancing the need to monitor costs while also recognizing that spending is an inherent part of the game.
A research VP in Gartner’s CIO team, Stewart Buchanan specializes in the economics of digital technologies in the enterprise. He recently discussed what CIOs can do in the face of these cuts.
Here are three highlights from the interview:
On why IT cuts should NOT be on the table during turbulent or down times
In response to the current economic turmoil, organizations are using digital technology to realize operational efficiency and cost savings and to transform their company’s value proposition, revenue and client interactions. This means a steady IT budget is necessary to push these digital business initiatives forward…
Without money for transformation, costs cannot be restructured. Many organizations mistake inaction for a cost saving but instead accumulate technology debt. In addition, when executives fail to increase the CIO’s budget in response to inflation, it doesn’t reduce the cost of IT or business demand for performance-enhancing technology.
On how CIOs can defend against the pressure to cut budgets by senior executives
Often the root cause of pressure to cut IT budgets stems from a failure to articulate the connection between technology spending and business outcomes. If the board or C-suite mandates technology spending cuts, the CIO should present a business view of IT spending against business performance…CIOs must engage business stakeholders and make them effective advocates for technology spending at the board level.
On what CIOs should do in the fact of cuts
Within the short time frames involved, CIOs must explain the risks to business stakeholders to share responsibility for risk acceptance.
Given the urgent nature of the emergency, CIOs should assess the effectiveness of spend reduction ideas by how much they will reduce spending.
