CTOs prepare for an economic upturn
Craig Goren has two things that top his to-do list — when the economy picks up. First, he wants to “throw a big ‘we survived’ party for the team,” and second, he wants to “initiate some of the technology ‘science projects’ that were put on hold,” says Goren, CTO of vendor Centerpost and president and CEO of Clarity Consulting, both based in Chicago.
Until an upturn takes place, CTOs find their hands are tied by economic strings when it comes to starting new IT projects. Still, it is important to prepare for an eventual upturn in both the economy and job market so that when it does arrive, the business is ready to jump on board.
For many CTOs, this means figuring out how to leverage projects that were scaled back as foundation technologies for the future. “Like many companies, I think right now we’re transitioning from just worrying about staying alive to being a little optimistic and thinking about future growth,” Goren says.
Ken McGee, research fellow at Gartner in Stamford, Conn., says his key advice for technical executives is to learn from the changes brought by tight times and to “follow the productivity reports” that are showing increased worker productivity without a dramatic increase in salary expenditures.
Companies should be investing now in technologies that will enhance the systems already in place to support employees’ work. The ultimate goal is to not necessarily hire more people and pay more in salaries when the economy improves but to leverage the increased work output executives have found during the downturn. “IT executives may not be thinking about [this philosophy], but I guarantee you the business executives are,” McGee says.
For example, McGee believes that CTOs will find they made or need to make increased investments in cellular service or connectivity to the office to augment the amount of work employees can do from home and on the road.
Some experts say that worker productivity will likely remain an issue even as things improve. “I do not think we will ever return to the [job and economic] market of the dot-com heyday,” Goren says. “In that environment, the business faced enormous pressure to make sacrifices in core values in order to remain competitive. Frankly, I am glad my consulting firm no longer has to deal with competitors who would staff a $50-per-hour art history major just out of school as an ‘expert,’ ” Goren says.
Goren says he is starting to see a bit of a light at the end of the tunnel when it comes to a market upturn. His consulting firm is at “almost 100 percent utilization for the first time in almost three quarters,” he says. Centerpost has also acquired more new customers in the first quarter of 2002 than any previous quarter in the company’s history.
Despite this news, the economy still is taking a toll as customers are taking longer and being more cautious in making spending decisions and choosing gradual, smaller projects, Goren says. “When customers don’t make long-term commitments, we have to be similarly cautious on our growth plans.”
For the long term, CTOs should be looking to use IT to “wire up businesses [and] convert them into real-time enterprises so you know where you are every single day,” McGee says.
“I believe we’re going to see a long-term, sustainable return to IT spending take place when executives get fed up with being surprised by suppliers that go out of business … bankruptcies, missed earnings, and other so-called ‘business surprises,’ ” McGee adds. “It’s time to divert IT spending away from the back office to wiring up the front office and combining the power of those two components of the business so that you’re getting real-time activity — you’re able to see where you are revenue and cost-wise — by the end of each business day.”
Indeed, the dot-com bust has left businesses a bit more tentative, at least for the time being, but CTOs can instead plan to streamline their tech strategy for the future.
“You want to evolve the organization going forward,” says Ameet Patel, CTO of LabMorgan, J.P. Morgan Chase and a member of the InfoWorld CTO Advisory Council. During the Internet bubble, “There was too much overcapacity in new ideas. The organization cannot absorb all those ideas at one time. I think business performance is really the key word as you look at how you drive your agenda,” he says.
— Stephanie Sanborn
