Tuesday, October 21, 2008

Technology Leadership during tough times

What is your firm's response to the dark economic clouds that have made their way from their horizon to just over head? Is it coming in the form of across-the-board budget reductions? Have you discontinued the use of contract labor and consultants? Are you putting off maintenance? Is the firm's response targeted on specific initiatives?

Because IT can be complex (needlessly so, at times), generalized actions often become the easy way out. They are easy to define and are so vague as to defy criticism. But they tend to cause more problems than they solve. That's because smart projects get cut just as heavily as more speculative efforts.
Discontinuing the use of contract labor is simply a different form of a generalized response. Although it is less painful than cutting staff, it often blocks the firm from executing on sound strategy for want of skilled resources.

Fortunately, the days of purely speculative projects are past us. There are exceptions, of course, but they tend to be found in situations where the decision makers face inadequate scrutiny (relatives of the owners or other favored positions). So that means that projects that promised positive ROI should not be abandoned, but they should be re-examined. Be sure that the assumptions on which the project ROI was based, especially financing costs and sales projections, are still valid. Renegotiate ongoing project expenses and rethink the timeline.

If the strategy is still sound, then forge ahead in executing it. When the clouds break -- and they will -- you'll be in better shape to take advantage of the sunshine.

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