McKinsey’s report “Five trends that will shape business technology in 2009” shows that, since the last downturn, technology budgets are larger, businesses have automated more processes, employees make greater use of tech-based productivity tools, and e-commerce has moved to the core of day-to-day operations. At the same time, IT organizations have established better mechanisms to govern IT decision making and have consolidated local IT operations to cut costs.
Based on this combination of cost pressures and IT requirements McKinsey’s report suggests that:
1) The year 2009 will be a tipping point for the CFO’s involvement with IT. They may sign outsourcing deals, sell and lease back hard assets, place favourable vendor financing at the core of hardware and software purchasing decisions.
1st Tip: Successful CIOs will give the senior-management team practical ideas on how to optimize cash.
2) IT budgets in many organizations will come under tremendous pressure in 2009, reducing investment for new business capabilities.
2nd Tip: Successful CIOs will have to position themselves as honest brokers, pushing hard to evaluate IT investments in a fact-based way.
3) Senior executives that have used IT less successfully in the past will probably throw up their hands and shut off all discretionary IT projects for the duration of the downturn.
3rd Tip: The most effective course of CIOs will be to explain what it would take to improve the value equation for IT investments.
4) Policy makers and regulators will probably demand that IT systems capture more and better data in order to gain greater insight into and control over how banks manage risk, pharma companies manage drugs, and industrial companies affect the environment.
4th Tip: Successful CIOs should enhance their relationships with internal legal and corporate-affairs teams and be prepared to engage productively with regulators.
5) The vendor landscape will likely follow the current downward pressure on aggregate demand and massive uncertainty in currency markets. New entrants will grow rapidly and some players could experience significant reverses.
5th Tip: Successful CIOs will manage their vendor relationships as a portfolio so they will be well positioned as new winners evolve. CIOs will also need to be vigilant about how to manage transitions created by the consolidation or weakness of some service providers.
You may find McKinsey’s report at: