February 29, 2008
Economic uncertainty is something of a mixed blessing when it comes to IT, says Frank Modruson, the CIO of consulting firm Accenture. It can be a challenge, and it can be an opportunity.Modruson says Accenture isn't cutting its IT budget in reaction to widespread worries about a recession. "It's not affecting me," he says, without being specific about IT spending other than to say it's a material part of the company's overall budget. "We're on our plan for the year."
Modruson says he's not seeing many CIOs changing their IT plans because of economic worries -- if you exclude the companies directly affected by economic problems, like those in the housing industry. "What I see is that companies are thinking how else they can use the technology they're investing in to run more efficiently," he says. Tech-spending worries are beginning to ripple through the economy. Nasdaq took a hit on Friday after Dell reported a 6% drop in net income in the quarter ended Feb. 1. While restructuring costs contributed significantly to that decline, Dell said it saw "corporate customers spending less," according to a story by the Wall Street Journal, and that "the drop in spending was especially noticeable among Dell's financial-services customers." That's where the challenge comes in, according to Modruson. If you're asked to cut back, "can you refocus your [IT] spend to still accomplish what you want to accomplish?" he asks. The answer should be yes. There's still a lot of money being spent on maintenance of IT systems, and that's very low value to an organization. "New stuff has the highest value to the company," Modruson says, "but it's also the easiest thing to cut, which is always the dilemma." The opportunity part of the economic-uncertainty equation comes in the decision-making process around IT projects and spending. "It forces you to make decisions quicker," he says. Sometimes in good times you tend to make those decisions slowly, he says. But when times are tough you need to make those decisions and get on with it. "It can be a catalyst for business change," he says. As for Accenture, there are several projects the company is continuing to pursue, in connection with social networking and collaboration and unified communications. "We see this as an opportunity to go further than our competition," Modruson says, "so we're continuing to invest."
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