Top Five IT Strategies to Implement in a Recession

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Even in an economic recession, companies can maintain their competitive advantage by investing wisely in IT capabilities.

Although a Computer Economics survey suggested that median IT spending had declined 6.2 percent in 2008 compared to 2007, taking drastic measures to cut costs by sacrificing IT capabilities may disadvantage companies in the long run, said Paul Chisholm, chairman and CEO of mindSHIFT Technologies, a provider of managed technology services.

“Generally, [companies get] burned when they haven’t kept up with IT,” Chisholm said. “If you let IT go two or three years without spending any money, you’re really just putting a roadblock between you and your customers.”

Large businesses in particular have endured heavy IT budget cuts because they’re prone to making multimillion-dollar decisions on a daily basis. Nevertheless, it would be wise for companies not to neglect IT investments if they hope to remain competitive, Chisholm said.

“People today realize they have to continue to put money into IT even in the bad times, especially with customer-facing applications,” he said. ““If you’re going to scrimp on something, maybe [it should be something like not buying as many PCs], but the core infrastructure you’ve got to be careful about.”

Chisholm outlined a few IT strategies employers can take into consideration during challenging economic times:

  1. Implement strategic technologies that will reduce costs. “Software as a service is a way that companies save money,” Chisholm said. “[It works] via a ‘pay as you go’ model versus the traditional model, where organizations purchase licenses for all software applications up-front.”
  2. Ensure stability for all customer-facing applications. Things that are Web-facing or customer-service related — such as upgrades — are necessary to stay competitive.
  3. Work with business managers to weigh a company’s needs and savings and prioritize productivity enhancements. For instance, an IT system with a 12-month payback must take precedence over one that will have a three-year payback.
  4. Virtualize. Virtualization allows companies with, for example, 10 servers to save money by enabling them to obtain a secondary site for disaster recovery without the up-front costs. “Managed service providers offer hosting environments where we have major power supplies and systems and processes that back up e-mail, data and applications,” Chisholm explained. “This can save [companies] money in the long run and enable them to continue doing business during unexpected interruptions, such as a power outage.”
  5. Retain highly skilled employees. It will cost more to replace them. It’s important to communicate regularly with employees — especially about the company’s financial stability — because they may otherwise worry about their jobs. Additionally, employers must not scrimp on employees’ training needs as this boosts retention rates.

– Deanna Hartley, dhartley@certmag.com

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Deanna Hartley

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