Monday, September 15, 2008

The Impact of Lean Times on IT Organizations

Times are tough in the US right now. Energy prices are high, investment banks are crumbling, real estate prices are tumbling.

Recessions hurt. Unemployment increases, anxiety escalates, and people suffer.

What about the impact on IT organizations?

To me, lean times require every company to re-examine itself and validate its priorities. Capital and operating budget processes separate the 'nice to have' from the 'must have'. Discretionary projects are deferred.

Since I have strong belief in IT governance, which suggests that IT strategy should be perfectly aligned with the overall strategy of the company, I welcome this kind of corporate introspection which results in a very specific list of high priority projects.

I would much rather have a short list of high priority, high business value projects that focus on the basics than a list of ambiguous, speculative projects driven by politics.

Lean times enable the IT organization to catch up, ensure its own processes are optimized, and realign its work with business owners.

There is the risk that resource constraints will tip the IT organization from 'lean and mean' to 'bony and angry' but ideally, appropriate governance process will align expectations and resource availability so that lean budgets yield realistic expectations of what can be done with existing resources.

Despite the doom and gloom every night on CNN, I would offer the optimistic suggestion that lean times are a positive experience for IT organizations, creating accountability for doing a few new projects really well.

Given the economies of scale that often happen with centralized IT infrastructure and well coordinated enterprise application projects, lean times can also reduce the number of competitive departmental/local efforts. As I've said previously, there will always be a balance between central and local IT, which is good, but taking the time to carefully plan enterprise resource allocation instead of simply reacting to evolving local efforts is optimal.

Yes, people are hurt by an economic downturn and I will not minimize the negative aspects of recessions. However, I feel that 2009 will be a great year for all my organizations to ensure that our IT priorities are the specific projects needed to ensure the stability of the business in lean times.


Unknown said...

Your blog is really vague today.

Lots of buzz words and IT business terms which we all hate to hear but are use to at this point.

John Halamka said...

Agreed - today's blog was more philosophical about how to deal with economic uncertainty. Tomorrow will be very concrete - a diatribe about printers with cartridges that cost more than the printer itself!