An unfortunate reality for IT managers during a downturn is that in most cases their budgets will be slashed. More than 50% of Canadian chief information officers expect spending declines this year, according to a survey from the CIO Association of Canada. Those declines will total a significant 12% on average.
That should be nothing new for IT leaders who struggled through the tech crash earlier this decade, but figuring out how to cope with smaller budgets hasn’t become any easier. “People believe every CIO has a voice at the table, and every CEO is technology savvy. But it’s just not true,” says Paul Held, leader of Deloitte’s national technology consulting practice in Canada. “They end up cutting strategic programs that really would enable the company for the future.”
But the future is exactly what’s on Hao Tien’s mind. As CIO of Toyota Canada, Tien is careful to consider how to best position the company for the upturn. His focus has shifted from short-term projects that provide interim gains to long-term initiatives that can save costs or address structural weaknesses at the company. “The mindset now is to look at cost structure and see how we can be more efficient,” he says. “This is the perfect time to look at the viability of systems and processes in a company.” In Tien’s case, this means retooling the technology behind the company’s warranty system. Updating this process also helps Toyota prepare for the increase in vehicle sales when the recovery arrives.
Catherine Boivie, senior vice-president of IT at credit union Vancity in Vancouver, is also readjusting her priorities. Her IT staff budget has been reduced by 4% this year, and while she typically has five or six large projects on the go, she’s now focusing on two or three. Involving other areas of the business in determining which projects to follow through with is crucial. “One of the major things is to work with management and, as a team, understand what will give the most bang for the buck. It can’t be done in isolation,” she says. Boivie also reviews every contract with Vancity’s vendors to see where the company can save costs.
But managing IT through a downturn isn’t all about reductions. During the tech crash, grocery store giant Sobeys decided to carry through with costly upgrades to supply chain management, an area in which rival Loblaw Group of Companies struggled years later. “A lot of people would have said now’s not the time to do it,” says Vito Mabrucco, managing director at research firm IDC Canada in Toronto. “But that investment has paid off, and you can see that by the way they’re expanding their business.” And that’s something IT managers should keep in mind when arguing against budget cuts. Joe Castaldo