PUBLICATION:  ITWEB MANAGED SERVICES & OUTSOURCING
DATE: 4 MAY 2010


CIOs take stock post-recession
By Staff writer, ITWeb

Johannesburg, 3 May 2010

Despite talk of economic recovery, the ICT landscape has fundamentally changed and industry has been full of news of struggling IT companies and even liquidations.

This is the natural culmination of two very tough years, explains Rob Sussman, joint-CEO of ICT managed servicescompany Integr8 Group. He advises CIOs to do a serious stock take of their future plans, systems and suppliers if they are to survive.

In much the same way as individuals do a yearly financial health check, Sussman believes companies should conduct a four-question systems check that includes: how will IT align and support the business objectives?; what new technologies can be incorporated to increase efficiencies?; would it be more cost-effective to outsource certain services?; and, is the IT service provider robust and able to deliver on all corporate governance requirements?

Sussman urges CIOs to firstly question whether their ICT supports the business objectives, and if they have right architecture in place to scale up alongside business growth plans. “Many companies have been so focused on managing costs that they have lost sight of managing growth. CIOs need to check their objectives against the business needs,” he advises.

Many companies are not harnessing the effects of the latest technologies such as cloud computing and hosting solutions, notes Sussman. He attributes this to security concerns, as well as a lack of infrastructure, people, and processes.

Sussman advises CIOs not to deploy this new technology for the sake of it, but points out that CIOs must remain knowledgeable about what their partners and suppliers are using to avoid an expensive catch-up exercise in a few months’ time.

One of the benefits of the recession is that it forces companies to find new efficiencies. “The downturn was good for one thing – it forced companies to focus on core competencies. Companies took a long hard look at what their core business is and then outsourced non-core activities,” observes Sussman.

Lastly, Sussman says companies should conduct a check of their service providers. Many of them were hit hard by the recession and are only now showing signs of how bad it was.

“It’s been a tough two years for all industries, and the IT industry won’t emerge without some collateral damage. Consolidation is good for the industry as it allows the companies that have resisted over-gearing and have a strong underlying financial model to catapult their businesses forward.

“Companies should be having frank conversations with their service providers and ensuring they are in a position to deliver on technical requirements,” he explains.

“At the end of the day, if your service provider goes under you are placing your own company at risk. Good corporate governance demands that you are aware of the stability of your service providers and can vouch for their longevity in good faith,” Sussman concludes.