Don't just spend less on IT, spend smart

Last Friday, writing for the Australian Financial Review (AFR) (“Anxious CIOs keep tight hold of the purse strings”, 8/5/09, p.53), Mark Jones reported on what he called “a dramatic downturn in corporate and government IT spending.”

Mark included some quotes from a recent interview with Fiona Balfour, former Qantas and Telstra CIO, and Steve Hodgkinson, research director at Ovum, for his The Scoop podcast. However, listening to the podcast its not just simply a case of no spending. Instead, as Mark hints at in the headline for his article, these IT commentators suggest that its more about tightening controls on how and where money is spent. In practice, they say, this means organisations need to revise their plans to suit the new financial environment by focusing on delivering business outcomes (although you have to wonder what they were doing before, then?) and controlling the complexity of their IT systems.

Personally, when ever I hear talk about ‘standardisation’ and ‘out of the box’ I immediately think of the impact on end-users (or if you want to take a more hard nosed perspective, lets call it a negative outcome for group and individual productivity). While this won’t show up on the business case or the IT budget, I have no doubt that it will come down to people to fill the gaps in these apparently economically sound solutions. This means email volumes will continue to grow, more spreadsheet-based applications will appear and in the worst cases - where users are left with no options to ‘hack’ their solutions together - these systems will actually fail to meet their objective. And along the way, you’ll probably end up with a bunch of frustrated and ultimately unproductive people. Some of those unhappy people will be your customers too.

At the end of the podcast, Hodgkinson suggests enterprises look at the Web 2.0 cloud computing model and bring that approach inside the firewall, in terms of ideas like light touch, self-provisioning, etc. Unfortunately, Mark didn’t have time explore this line of thought but I think an enterprise Web 2.0 inspired approach is the counter balance to the problems a tightly constrained IT system will create.

This will require a little bit of out of the box thinking (dare I say it, ‘innovation’). This doesn’t mean you need to rip out your ERP system and replace it with Facebook. If this is what you think, then you really are missing the point. Its actually about enhancing and augmenting complex transactional systems with lightweight solutions so that the productivity gap I describe above can be managed as an above the line item in terms of:

• Supporting conversational collaboration (to help with problem solving and dealing with the bumps rigid transactional systems create or have been designed to support);
• Enhancing information management, by adding social networking and social information discovery layers; and
• Leverage data and information from underlying transactional systems into these social computing layers.
  

If you happen to be a CEO reading this and your CIO gives a business case or plan based on constraint and control, make sure you ask them what’s their strategy for helping staff and customers deal with the rigid, narrow systems they are proposing. Maybe that great TCO isn’t so attractive after all?

Tags: AFR, Australian Financial Review, Mark Jones, Fiona Balfour, Steve Hodgkinson, IT, Budgets, Productivity, Web 2.0, Enterprise Web 2.0, Enterprise Social Computing