WHAT CIOS NEED TO ASK THEMSELVES

Applying a four-question audit to ensure they are on the right track is critical to CIOs.

News of struggling IT companies, and even liquidations in the industry, is the natural culmination of two very tough years. In much the same way as individuals do a yearly financial health-check, companies should be doing a systems check that includes: how their IT will align and support the business objectives; what new technologies can be incorporated to increase efficiencies; whether it would be more cost effective to outsource certain services; and ask if their IT service provider is robust and able to deliver on all corporate governance requirements.

We are roughly a third of the way through 2010. The landscape has fundamentally changed, and while the newsman keeps talking about an economic recovery, the IT industry has been painfully aware of the bad news in our industry. Now is the time for CIOs to do a serious stock take of their future plans, their systems and their suppliers.

By answering these four questions, companies will be in a position to see if their IT strategy is still delivering real business value:

The first and most logical point of departure is to ask: does my ICT support my business objectives, and do I have the right architecture in place to scale up alongside my business growth plans. Many companies have been so focused on managing costs, they have lost sight of managing growth. CIOs need to check their objectives against the business needs.

The second check point is not as self-evident as it seems. Many businesses are not taking advantage of newer technologies like private and public cloud computing and a combination of remote and on-premise hosted environments. This may be because of security concerns, or just because they don’t have the infrastructure, people or processes, to support it. Companies should not be installing new technology for the sake of it, but unless they are on top of what is available, and what their suppliers and partners are using, they may end up playing an expensive game of catch up in a few months time.

One of the benefits of the recessions is that it forces companies to find new efficiencies. Companies should continue to grow client bases of customers and attract a vast amount of new customers that are looking for the innovation and entrepreneurial spirit together with agility.

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. However, outsourcing really comes into its own when companies come out of cost-cutting mode. Up scaling your IT environment to grow with the company is just so much easier when it’s somebody else’s problem.

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

It’s been a tough two years for all industries, 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 that they are in a position to deliver on technical requirements. 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.

Rob Sussman is the joint CEO of the Integr8 Group (www.intergr8group.com).

PUBLICATION: HR FUTURE

DATE: 24 MAY 2010