Jennifer Foreshew | November 11, 2008
TECHNOLOGY departments will probably be among the first to be critically reviewed as organisations slash costs to ensure their survival in times of economic downturn and slowing growth, a study finds.
However, cutting IT expenditure in tough times, particularly staffing, can leave organisations unprepared to address the challenges of rapid growth when the economy recovers, it concludes.
The study, by Intelligent Business Research Services, says IT is often seen as a soft target but is more vulnerable if there is insufficient collaboration and transparency between it and the rest of the organisation.
"This can result in a view that IT is a necessary evil, a law unto itself and a cost centre only," says the report, Ensuring the Provision of IT Support and Service During Times of Economic Downturn.
"The value added by IT in these circumstances is neither recognised nor acknowledged."
The research urges IT departments to challenge the view that IT is only a cost centre.
"Every dollar invested in IT service and support should have a direct impact on the productivity and efficiency of an organisation," the report says.
It warns that trimming too much IT spending can cause a decline as productivity falls and this can lead to further cuts.
"The organisation may find itself in a vicious circle which could easily spiral out of control," says the research, by Brian Bowman.
The impact of cutting technology spending can be felt faster and with more intensity, he says.
Chief information officers must be aware of changes to business strategies brought about by the slowdown in growth, which can affect IT departments.
The research concludes that tech departments which constantly review their structure and value will be better placed to ensure that any proposed cost cutting does not inhibit their ability to deliver satisfactory support and service.
Further, they will be in a position to react quickly and efficiently when the downturn ends and the economy begins to grow again.
IT departments must continually communicate and demonstrate the value they provide.
This means both management and IT departments will be aware of the ramifications of downsizing and joint decisions can be made, the study says.
IT departments must initially ensure the services to be provided, and the service levels applicable, have been discussed and agreed with the users, and performance against these agreed service levels is being documented and published.
"A proactive approach and close collaboration and transparency with the user are key in achieving this," it says.