Friday, September 18, 2009

Caught between peak and valley -- How CIOs survive today, while positioning for tomorrow

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. View a full transcript or download the transcript. Download the slides. Sponsor: Hewlett-Packard.

Are CIOs are making the right decisions and adjustments in both strategy and execution as we face a new era in IT priorities? The combination of the down economy, resetting of IT investment patterns, and the need for agile business processes, along with the arrival of some new technologies, are all combining to force CIOs to reevaluate their plans.

What should CIOs make as priorities in the short, medium, and long terms? How can they reduce total cost, while modernizing and transforming IT? What can they do to better support their business requirements? In a nutshell, how can they best prepare for the new economy?

Here to help address the pressing questions during a challenging time -- and yet also a time in which opportunity and differentiation for CIOs beckons -- is Lee Bonham, marketing director for CIO Agenda Programs in HP’s Technology and Solutions Group. The interview is moderated by me, Dana Gardner, principal analyst at Interarbor Solutions.

Here are some excerpts:
Bonham: We all recognize that we’re in a tough time right now. In a sense, the challenge has become even more difficult over the past six months for CIOs and other decision-makers. Many people are having to make tough decisions about where to spend their scarce investment dollars. The demand for technology to deliver business value is still strong, and it perhaps has even increased, but the supply of funding resources for many organizations has stayed flat or even gone down.

To cope with that, CIOs have to work smarter, not harder, and have to restructure their IT spending. Looking forward, we see, again, a change in the landscape. So, people who have worked through the past six months may need to readjust now.

What that means for CIOs is they need to think about how to position themselves and how to position their organizations to be ready when growth and new opportunity starts to kick in. At the same time, there are some new technologies that CIOs and IT organizations need to think about, position, understand, and start to exploit -- if they’re to gain advantage.

Organizations need to take stock of where they are and implement three strategies:
  • Standardize, optimize, and automate their technology infrastructure -- to make the best use of the systems that they have installed and have available at the moment. Optimizing infrastructure can lead to some rapid financial savings and improved utilization, giving a good return on investment (ROI).
  • Prioritize -- to stop doing some of the projects and programs that they’ve had on their plate and focus their resources in areas that give the best return.
  • Look at new, flexible sourcing options and new ways of financing and funding existing programs to make sure that they are not a drain on capital resources. We’ve been putting forward strategies to help in these three areas to allow our customers to remain competitive and efficient through the downturn. As I said, those needs will carry on, but there are some other challenges that will emerge in the next few months.
Growth may come in emerging markets, in new industry segments, and so on. CIOs need to look at innovation opportunities. Matching the short-term and the long-term is a real difficult question. There needs to be a standard way of measuring the financial benefit of IT investment that helps bridge that gap.

There are tools and techniques that leading CIOs have been putting in place around project prioritization and portfolio management to make sure that they are making the right choices for their investments. We’re seeing quite a difference for those organizations that are using those tools and techniques. They’re getting very significant benefits and savings.

The financial community is looking for fast return -- projects that are going to deliver quick benefits. CIOs need to make sure that they represent their programs and projects in a clear financial way, much more than they have been before this period. Tools like Project and Portfolio Management (PPM) software can help define and outline those financial benefits in a way that financial analysts and CFOs can recognize.
Listen to the podcast. Find it on iTunes/iPod and Podcast.com. View a full transcript or download the transcript. Download the slides. Sponsor: Hewlett-Packard.