Global CIO: CIO As Chief Cost Cutter: It's Not Enough - InformationWeek

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Commentary
2/25/2009
02:41 PM
Bob Evans
Bob Evans
Commentary
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Global CIO: CIO As Chief Cost Cutter: It's Not Enough

When the upturn arrives, will your customers be satisfied with the capabilities your company had before it went into lockdown mode or will they be looking for growth strategies?

If it's true that when all you've got is a hammer then everything looks like a nail, then CIOs need to be careful that their current and temporary focus on cost cutting doesn't end up relegating them to permanent positions as penny-pinchers on the CFO's staff.

There's no question that CIOs need to be deeply involved in identifying and squeezing out nonessential costs -- with the IT organization's unique opportunity to see the web of business processes that run across the entire organization, CIOs are in a great position to attack inefficient systems and processes and liberate precious cash.

But cost cutting alone isn't enough. At some point in the future -- perhaps by the fourth quarter, or maybe even into 2010 -- the American economy and the world economy will turn around and customers will start spending again, and suppliers will start supplying, and factories will start buying and building, and logistics companies will start planning and shipping.

And when that happens, will your customers be satisfied with the capabilities your companies had in late 2008 before your company and you and your team went into lock-down mode and focused all your time and attention on cutting costs? Will your business partners across the organization be able to compete aggressively against companies that have continued to innovate during the downturn? Will competitors that have cut not only costs but also product-development time and customer-engagement cycles box your sales team out of opportunities?

If you let rigorous but essential cost-cutting morph into a broader disconnection from the needs of your customers and the evolving marketplace, how will you make up for that lost time? Odds are, you simply won't be able to -- every industry and every market is operating in faster and more-relentless cycles today than they were a few years ago, and the odds of playing a successful game of catch-up are not good.

At a roundtable meeting yesterday morning of business technology executives in the financial industry, about 10% of the attendees said that they have zero interest in pursuing innovative ideas because they and their teams are totally focused on completing the integration work tied to major acquisitions that have been made recently. Another 25% to 35% said their bosses have sent very clear and unmistakable messages about where to focus: The only priority is to survive.

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