IT gets ready for the recovery

Don't just sit there -- now's the time to position your IT department to own the economic upturn when it comes around.

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Typically, the university coughs up cash for a big project in one fiscal year. But with the downturn obviously coming, Lyon in late 2008 proposed a four-year capital-expense payment plan. His argument: It would prevent the university from having to take a big one-time hit, and it would not affect the yearly operating budget. The end result is that the university, which approved the project, created wiggle room in its operating budget and its network.

For its part, Applied Materials actually increased spending on communications technology. In fact, it accelerated an ongoing videoconferencing project after the downturn struck, aiming to reduce travel costs without losing face-to-face contact with customers and suppliers.

Kifer says the technology is so good it's almost like having in-person meetings, which creates a new model for doing business, even in an upturn. "We can reduce the travel budget without losing continuity and closeness with customers," he says.

BMC Software also has boosted spending on communications technology, upgrading its video gear and increasing bandwidth to make it easier to use video in instant messaging. "We're investing in how to use these tools, because even if quality of the video is low, it somehow makes a conversation more meaningful," says CIO Settle.

Hire a few good people

Good people are being let go by firms that either aren't thinking clearly or have no choice but to cut muscle, says John Ciacchella, a principal at Deloitte Consulting's San Jose, Calif. office.

That means there are talented people available who can work with both IT and business units, and companies need to go after these talents even if they're cutting staff, Ciacchella says. It may mean an extra cut or two in some areas, he acknowledges. But hiring key people now automatically puts companies in a better position when the upturn comes.

Companies that are hiring are enjoying the bonanza of top-quality applicants. RightNow Technologies, a mid-sized Web applications vendor in Bozeman, Mt., has 30 open IT positions. It's invested in a recruiting management tool, Taleo, to help sift through hundreds of potential resumes. Its CIO, Laef Olson, says he and his top managers meet for an hour a week to go through candidates to fill senior-level networking jobs.

"Instead of looking for a guy with 'Cisco training,' I'm getting someone experienced with MPLS, Voice-over-Internet-protocol and quality-of-service in a single candidate. We're raising the bar on talent," Olson says.

Innovate to invigorate the bottom line

As with many other companies, the downturn has caused sharp declines in growth at Ebags.com, a Denver-based luggage and bag e-commerce site, and with it a cutback in expenses.

The company had built a staff based on 30% estimated growth rates, so anticipated flat sales meant big staff cuts, 17 out of 40 employees, including 35% of its IT staff, says Peter Cobb, its senior vice president and co-founder.

Those that are left are putting their priorities into adding features that directly help customers find goods to purchase. So it's doing things like letting people search by color, and adding new tags to the site, like "laptop bag," for easier searching. It also used site analysis from Gomez Inc. to figure out how to get page loads down from 1.5 seconds to 0.7 seconds.

Cobb says these priority shifts should put it in good stead when consumers begin buying again.

In the end, IT managers say, their priority is to not just endure the downturn, but be prepared for the recovery when it finally arrives. As UMass-Boston's Agee says, "We're lining up our strategic priorities for the university, and targeting our cuts as far away from them as possible."

Michael Fitzgerald is a freelance writer based outside of Boston.

Copyright © 2009 IDG Communications, Inc.

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