Recovery Ahead

Don't just sit there. It's time to position your IT department for the economic upturn, whenever it comes.

1 2 3 4 Page 3
Page 3 of 4

That doesn't mean it avoids internal layoffs, "but they're in the hundreds rather than the thousands," says CIO Ron Kifer. And as soon as business shows signs of turning around, he can quickly instruct his outsourcers to add personnel for projects that are in the works.

Kifer says IT's success in crafting such flexible outsourcing agreements has led other parts of the company to apply the same managed-services mantra.

For example, Applied Materials found it was employing financial analysts who were spending most of their time developing reports and aggregating data -- tasks that could be done outside the firm, reducing costs by a third through lower head count. The remaining financial analysts were then able to focus on more valuable work.

Even so, firms should be careful not to do blanket outsourcing, says Jim Milde, a veteran CIO who is now executive vice president of global services at IT services firm Keane Inc. "You never outsource your core, customer-facing IT people who work with your business," he says. Instead, consider outsourcing business analysts, call centers and some business process functions.

Spend strategically, finance creatively

The University of Northern Florida (UNF) won't know its new IT budget until the state legislature signs off on it for fiscal 2010. But IT has already been taking creative money-saving actions.

Stephen Lyon, assistant director of network engineering at UNF in Jacksonville, says his group surveyed students and found that they were bringing not just computers to campus, but game consoles, various handhelds and netbooks, all of which need their own IP addresses.

Meanwhile, various departments at the university were examining new embedded systems to manage things like sprinkler systems, parking permit dispensers, lights and elevators. All of these help the university save money, but they too need bandwidth.

The school needed a communications infrastructure upgrade. Lyon saw that multiple groups in the university had problems that could be solved with a 10 Gigabit Ethernet backbone and Gigabit Ethernet to the desktop.

Typically, the university coughs up cash in one fiscal year for a big project. 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 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, the videoconferences are comparable to in-person meetings; that has created 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.

1 2 3 4 Page 3
Page 3 of 4
7 inconvenient truths about the hybrid work trend
Shop Tech Products at Amazon