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The Naked CIO: Shadow of the job axe
Where should the IT cuts fall?

By Naked CIO

Published: Monday 03 March 2008

With spring and recession in the air, a CEO's fancy turns to pruning costs - and for the Naked CIO's department that means job cuts. He is already under-resourced, so what should he do?

Over my morning coffee I review the latest satisfaction statistics for my department's services. There are some snide comments on responsiveness and complaints about the time it takes to get things done.

If you're like me, you've been playing catch-up in your IT department for years. The company's growth and its demands on IT always outstrip our resources.

Now with a recession looming, there is a drive to lower costs. That means reducing headcount and being exceptionally frugal in meeting existing business needs.

So I start reviewing an organisational structure that is already ill-prepared to meet existing business requirements. Which part of the leaky pipework can possibly sustain a cut?

Funnily, after I exclude certain employees - we don't want to upset the fine legal minds in the HR department - I am left with exceedingly few options.

It disturbs me that I might consider excluding certain people from consideration because of sex, race or age. Correct me if I am wrong but isn't the whole point of equal opportunity to exclude decisions based on exactly this premise?

But what frustrates me more is that to the business my department is nothing more than a financial rubric on some monthly report that gets red-circled as a key area for cost reduction.

It doesn't matter that payroll represents more than 80 per cent of my annual operational costs. Cost reduction means job losses.

It appears to me that IT is about two years behind the business in terms of resources-to-growth models. So shouldn't we wait two years before cutting IT costs?

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Business alignment is a fallacy. Organisations do not want business alignment of IT because if it were achieved they would have to look beyond cost and really examine IT's potential for the business.

So despite pressure to improve services, decrease downtime, deliver new and increasingly ambitious projects that define forward-thinking technology, my priority is now to save an easy million - oh, and still improve services.

As a CIO I want to innovate, expand the company's appetite for creative and new ways of managing traditional enterprise problems.

IT has a unique perspective that comes from seeing the whole business and how technology can integrate practices and business departments.

The whole exercise seems circular to me. IT is seen as a poor producer because of limited resources. CEOs want to cut costs from poor producers. This exacerbates the problem.

If my business really wants to handle the fears of recession the best way to do it is to increase IT's operational budget by 100 per cent. That increase would allow us to develop systems to increase productivity and cut costs by twice that additional operational cost within 24 months.

I can prove this - my problem is no one wants to listen. So all I can do is admit that as a CIO I'm not an innovator - just a bean-counter.