Saturday, March 28, 2009

The new trends in IT for the recession

Clearly recession is the time when changes are needed and there is higher probability that th change will happen. Obviously, the first driver is the need to cut expenses, however, there are additional aspects that need to be seen. The IT passed several recession periods and after all of them new technologies appeared. It will probably happen again, but only afterwards one can point out the successful new technologies that appeared.

In this post, I would like to point some of the that I think will be strengthen during the current recession.

Focusing on business targets - The IT looks like it has its own life. I have the feeling that technological companies develop new technologies and then look for needs. This is why probably some CFO's have feeling that the IT is unavoidable expenses rather than good investment.

Switching from capabilities to services - Most of the products today are services. If you can charge back-to-back for what it costs you that is the best model.

Change the IT into self sustained unit - At some point, the IT will have to get its budget (or at least most of it) from other units of the organization or the clients. Some of the services are already build that way, e.g. banking transactions in which the IT can calculate the cost of each transaction. More challenging and therefore later will be tasks like internal systems where the costs are hard to be estimated like applying CRM or ERP systems where the benefit is for all, but who should pay for it. One option is to offshore or outsource this operation and there the cost is clear and the boundaries are well defined. In this case, the management will decide where the budget will come from which is more or less the same.

Offshoring and Outsourcing - This is an ongoing trend for more than a decade and will keep going. There are many benefits like having a small company, focusing, etc. The only drawback that I can see is the fact that some of the knowledge and capabilities are taken out of the company. It is bad, but so many information leaks that it becomes almost impossible to deal with it. If you can not trust your supplier - do not do it !

Last issue that I want to bring up is the service level from enterprise. Some companies give just lousy service ! It makes the operation miserable and poeple that work on it un-happy. So consider to give your feedbacks for you, your family and your co-workers.

Eddie