Study: Don't repeat IT mistakes from last downturn.

A report released today by research firm voke, Inc. makes a point that probably shouldn't need to be made these days - but, given the economic climate, it's probably not a bad idea to say it anyway.

A report released today by research firm voke, Inc. makes a point that probably shouldn't need to be made these days - but, given the economic climate, it's probably not a bad idea to say it anyway.

Resist the IT downturn slash.

Former Gartner analyst Theresa Lanowitz, in an unconventional report of sorts, doesn't go into much statistical detail about the effects of IT cutbacks during the post-Y2K downturn. But she issues some pretty strong reminders about the mistakes that companies made after investing a lot in Y2K preparation. These reminders, however, don't necessarily need numbers or statistics to back them - the memories should still be fresh. She writes:

  • Outsourcing to cut cost: Outsourcing was viewed as a panacea, however, many IT organizations spent more money because of poorly planned and implemented outsourcing schemes.
  • Lack of innovation on the vendor side: This led to lack of innovation and education on the IT side. IT organizations were in turmoil because spending was dramatically reduced, and software vendors stalled new products and focused only on necessary items. IT did not have the leverage with either the line of business or vendors to demand new technology to support very real issues.
  • Poor quality: The reduction of IT spending saw the demise or vast reductions in QA organizations. Many IT managers and even consulting organizations viewed “quality” as extraneous and something anyone could do.
  • CFOs made business and technology decisions: Technology decisions were simply made on the basis of initial purchase prices with no regard to how the decision would ultimately affect the business. The CFO-led purchasing power elevated a person in the organization who had no technology awareness to a level of ultimate and final decision maker. The impact from CFO-led purchasing decisions was far reaching and long lasting.

That's not to say that an IT department should be immune to cutbacks. In tough times, belt-tightening can occur across the entire operation - but IT doesn't necessarily need to take the biggest hit. In more recent years, IT departments have become more integrated with the company, an important piece of the puzzle. The phrase "software runs the business" is now common, as well as widely understood. The report, available to those who register for a free membership, goes on to highlight ways that companies can invest in technologies to prepare themselves for the economic recovery, including virtualization strategies. In closing, Lanowitz makes one final point about people:

All too often in a time of economic downturn, people are seen as disposable, and most often, the more expensive a head is, the easier the justification for reduction. For businesses to remain competitive and grow during this economic downturn, retain key people. DO NOT just keep the less expensive heads... The IT organization of the future is less about those who can perform repetitive, manual tasks than it is about those who have skills to manage projects, act as a conduit of information, and view IT as a strategic enabler to the line of business.

Well said.