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Keep your key projects off the chopping block

How to save make-or-break IT initiatives in troubled times

By Tam Harbert
February 23, 2009 12:00 PM ET

Computerworld - There was a joke at the height of the Cold War: What should you do in the event of nuclear missile attack? Take shelter, duck and cover, then kiss your butt goodbye. If you're trying to save IT projects -- even the most strategic ones -- you might feel the same way as you struggle through today's historic financial meltdown.

"I've never known so many people all predicting doom and gloom at the same time across every front," says Peter Whatnell, CIO at Sunoco Inc. and the new president of the Society for Information Management. "I'm being overly dramatic, but there doesn't appear to be a ray of hope anywhere."

As 2008 drew to a close, market research companies continued to slash their financial forecasts. In October, Gartner Inc. lowered its estimate for 2009 U.S. IT spending growth to 2.3%, down from an earlier prediction of 5.8%. And last month, Forrester Research Inc. predicted a 3% decline in spending on IT goods and services this year compared with 2008.

Companies aren't just talking about reducing IT spending; they're talking about reducing it drastically. "I'm hearing folks talk about significant double-digit reductions, and quickly," says Whatnell.

Like emergency room doctors treating a gunshot victim, many executives feel that the priority is simply to stop the bleeding, says Gartner analyst Jorge Lopez. That mentality makes even strategic enterprisewide projects vulnerable. "[The victim's] relatives may be saying, 'Oh my God, he's getting married in three months,' but you can't even listen to that, right? If you don't stop the bleeding, there is no wedding."

Do you have what it takes to save a strategic IT project?

As a principal at Deloitte Consulting, John Ciacchella advises companies trying to manage through this economic crisis. He has observed the following qualities in CIOs who have successfully saved strategic projects:

  1. They are realistic about what is strategic and what is not.
  2. They have credibility with their organizations. These CIOs are good stewards of their resources, work well with other executives and demonstrate a willingness to make sacrifices for the common good.
  3. They are smart about the design and structure of the project. And they're willing to adjust timing, scope or costs to fit the economic environment.
  4. They are assertive. They can make a case to convince others of the merits of keeping a project. "Even after doing the first three things, you've still got to fight," says Ciacchella. "But now you've built a very strong base to support yourself."

Some companies have even shortened their planning time frame from 12 or six months to just three because of economic uncertainty, says Forrester analyst Alex Cullen. Each quarter, they reassess their situation and decide whether to maintain the same level of spending.

"That can force a lot of uncomfortable trade-offs," Cullen says. "But it is a good way of avoiding panic. It does keep options open, and at this time, the biggest thing is uncertainty. Nobody knows how bad it might get."

Must IT executives resign themselves to kissing strategic projects goodbye? No. There are things you can do to keep critical initiatives on track.

Strategic to whom?

Like an emergency room doctor, you may have to perform triage. First, step back and take a hard look at the project. Sometimes CIOs consider a project strategic, only to find out later that they were the only ones who did.

IT people tend to justify projects in technical terms, rather than using financial metrics, says Michael Krigsman, CEO of IT consultancy Asuret Inc. In today's economy, the only projects to survive will be those rooted in concrete business value and proven by specific financial metrics, he says.