Things That CIOs Should Know Keep Their CEOs Awake Nights

March 23, 2009 Timothy Prickett Morgan

This year is a bit of a mental and emotional challenge as well as being an economic one. And the whiz kids at Gartner make a habit and a business out of trying to say something intelligent about the goings-on in IT Land to help CIOs cope with conditions and their bosses, the CEOs, presidents, or owners.

We are all in a bit of a state of shock absorbing the changes to the economy, our businesses, and our lives. But you have to shake it off and start planning for the future, all the same, says Gartner, which released a report called CEO Concerns 2009: Dealing with the Downturn last week. (You can view that report at this link.)

“Today’s CEO concerns provide an advanced look at what will become CIO priorities in 6 to 18 months,” explains Jorge Lopez, vice president and distinguished analyst at Gartner. “We’ve identified these conclusions based on more than a dozen sources of CEO insights, our own analysis of business and economic trends, and changes in the IT landscape.”

So without further ado, here are the seven things that are apparently keeping your CEO up at night, in order of importance:

Restructuring: This is the real problem caused by economic instability. Layoffs of employees and shutdowns of business units, mergers and acquisitions, and rejiggering of entire industries is happening out there and very likely at your company, too. “As the restructuring plan unfolds, CIOs must be prepared to clear the table of current plans and start again, deliver significant cost reduction, deliver significant headcount reduction, cancel some major projects no longer aligned with survival and ensure that all outsourcing partners are viable,” says Gartner in the report. “At the same time, they will need to deal with unexpected acquisitions and divestitures, manage higher risk taking on projects, work with lower procedural obstacles and stronger CIO powers, and build contingency plans for significant suppliers.”
Can’t Write Off Fast Enough: CIOs have to be ready to jump at a moment’s notice and help in any way when the CEO wants to start paring down. And watch out for talent raids on your organization even if you preserve key IT employees after layoffs.
Loss of Business and Governmental Trust: The lack of transparency and regulation in the economy has been exposed, and people are not looking too kindly at businesses and governments. A lot of trust has been lost, maybe even more trust has been lost than money, if you can believe it. And unlike money, you can’t borrow trust. (Gartner didn’t say that–I did.)
Globalization Instability: Supply chains and manufacturing operations are now global, just like sales channels have been for many years. When one part of the world goes haywire, it can have far-reaching effects.
New Major Regulation Coming: After decades of deregulation, expect a backlash. New regs from local, state, and national governments means changes to IT operations and business processes. And that means headaches akin to Sarbanes-Oxley. Brace yourself.
Green Is Not Going Away: Going green with IT operations was all the rage in the IT press right up to about August 2008, when the economy went south and cutting costs–a lot more than you can do by saving energy in the typical data center–came to the front burner. But Green IT is still on the back burner, waiting for its turn to be a priority again. Go green where you can, when you can. Save that money.

That’s Gartner’s take on what CEOs are worried about as it related to IT. I think CEOs are not all that complex, and I think some of these issues are overblown by Gartner. I think CEOs are only worried about two things: staying in business now and laying the groundwork to position themselves to beat the competition when–and if–the economy returns to something akin to normal. Staying in business now usually means cutting costs and preserving as much revenue and profits as possible. Anything a CIO can do to cut costs is needed right now, no matter what pet projects might be on the table.

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