As we progress through the downturn, organisations are under unprecedented pressure to reduce costs and re-evaluate business models. However there are clear expectations that some organisations will nevertheless take advantage of new technologies and grasp the opportunities that these uncertain and volatile times will bring. The challenge therefore is more than just surviving the downturn, it’s about understanding how to protect and sustain the organisation whilst seizing the opportunity to innovate – in order to emerge from the downturn ahead of the competition.

It is now widely acknowledged that IT is the single most effective approach to improving business performance - whether the focus is growing revenues or becoming more cost effective. In the current climate, however, CIOs face competing and opposing challenges in their key business priorities, which typically include reducing costs across the enterprise, yet driving business growth and new customer acquisition, and improving internal effectiveness and efficiency.

The degree to which CIO can deliver against some or all these business priorities will significantly determine their organisation’s ability to ‘survive then thrive’ the downturn. Organisations need to be in ‘Operational Survival’ mode, with CIOs driving a series of IT interventions that will protect and sustain the business, get more for less from existing IT assets and staff, and introduce innovative and entrepreneurial solutions to drive growth and more effective ways of working.

Operational Survival

Business strategy in 2009 is about survival. All parts of the business – be they revenue-generating product divisions, support and infrastructure functions, or regional processing hubs – are being scrutinised and in some cases dismembered for cost savings and efficiency improvements. This radical re-shaping of business portfolios and operating models will persist, and it will be imperative to ensure all operational areas, including IT, are aligned and enabled to drive their contribution to survival.

We believe that in order to survive the downturn and emerge ahead of the competition, IT will play a critical role, and businesses must seize the opportunity to drive forward in three crucial technology-related areas:

• protecting the business – by assessing and tackling key business and information risks
• achieving ‘much more for much less’ – by pushing the boundaries of existing IT cost reduction initiatives and driving for greater efficiency in IT operational processes through the use of Lean IT techniques
• actively engaging in innovative and entrepreneurial initiatives, to enable more effective ways of working, such as social networks and collaboration tools

1. Protecting the business

Protecting the business is all about managing business and information risks. Whilst managing these risks may be largely business-as-usual for a majority of organisations, our view is that the downturn will heighten the risks that businesses face arising from poor or malicious employee behaviour, badly controlled information systems and data, insecure operations and inadequate business resilience. More frequent assessment and monitoring of these risks will become more important, as will effective and appropriate actions to mitigate identified risks.

2. Much more for much less

Achieving ‘much more for much less’ implies cost reduction within the current operations. But where do you cut costs, and what will the implications be? IT programmes that underpin the delivery of that strategy ought to be terminated or mothballed if the benefit is not significant, accelerated if the benefit is immediate or optimised otherwise. However, this is not about simply terminating, or postponing a large programme or shedding a few staff. Achieving much more for much less requires detailed insight into the services that the IT department provide in order to support the business, and analysis of the operational processes and systems in order to ensure they are tuned to provide maximum efficiency at minimum cost, for example using Lean IT techniques. It also requires a critical review of governance, organisational structure and service providers in order to increase the agility of the IT function and so that it can respond to tactical changes that the business may need to make in order to survive.

3. Innovation and Entrepreneurship

Performance can be accelerated by engaging in innovative and entrepreneurial initiatives that will enable the business to emerge from the downturn ahead of the competition. Technology innovations are already driving different business models and ways of working – examples include wikis, social networking and collaboration tools such as Yammer, Web 2.0 and cloud computing or ‘software as a service’ (SaaS).

We believe that such IT innovations and technology-led entrepreneurial ways of working will become core mechanisms for operational survival in 2009, to extend performance and achieve ‘much more by many more for much less’. One example of this is how businesses can drive performance from their IT service provider network through a fusion of our traditional Collaborative Partner Management methodology and the emerging Automated Social Networking analysis tools. The premise for this is that to survive in this economic climate, businesses will not only need to have a very clear view of the role of their critical IT service providers – to whom their survival is intrinsically linked – but also to ensure behaviours at both the corporate and individual levels are fully aligned with the success of the business.