Running IT in 2010: Better response times on a budget

Running an IT department in 2010 requires new processes that boost responsiveness, and vendor management and IT outsourcing practices that cut costs in IT budgets. Learn more here.

In 2010, as an economic upturn remains uncertain, IT must find ways to address business demands for revenue and profit growth. Innovative companies are incorporating such methodologies as agile IT, IT Infrastructure Library (ITIL) and lean computing to identify and deploy business and process improvements that quickly add value throughout the year. At the same time, enterprises are renegotiating vendor and IT outsourcing contracts to cut costs and ensure long-term service delivery success.

In this guide, learn how CIOs can get IT and the business on the same page, introduce new methodologies to boost responsiveness, and justify expenditures. Also, find out how to operate on a limited 2010 IT budget, and on which technologies CIOs are spending their hard-fought dollars this year.

This guide is part of SearchCIO.com's CIO Briefings series, which is designed to give IT leaders strategic management and decision-making advice on timely topics. For a complete list of the topics covered to date, visit the CIO Briefings section.

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  2010 IT budgets
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On the face of it, 2010 will be even more challenging than 2009 for Tom Gainer, CIO of First Bank Southwest, a regional bank based in Amarillo, Texas. Gainer's 2010 IT budget is about $150,000 less than last year's. Capital spending is down. A long-planned document imaging project has been shelved until 2011, and so has a server virtualization project.

"These two projects are huge and costly, and right now we can operate just fine without them," Gainer said in an email detailing his 2010 agenda.

As many companies like First Bank are still hunkered down, IT remains in a difficult position in 2010. If the economy begins to wake up, technology spending will increase -- but if the recovery falters, IT budgets will be flat or decrease.

In fact, Gartner Inc. and Forrester Research Inc. see IT budget growth quite differently based on their view of the economic recovery. While these consultancies see opportunities for adding capabilities in 2010 using Web 2.0, virtualization and cloud computing technologies, many of the IT professionals we talked to are focusing mostly on traditional software and hardware upgrades to increase productivity and gain efficiencies.

Learn more in "IT budgets still uncertain as CIOs weigh 2010 technology spending." Also:

  IT responsiveness to the business
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IT budgets may be at an all-time low, leading to smaller staffs and delayed business projects, but this lull is a prime time for CIOs to introduce agile IT best practices designed to reduce waste and realize faster IT response times.

Project portfolio management and IT Service Management (ITSM) are two approaches that CIOs are employing either together or separately to achieve agile IT.

With ITSM, one of the first steps toward better response times is the creation of a service catalog. Users or groups can pick and choose preapproved services through a Web-based interface and with minimal interaction with IT.

Before creating a business-facing IT services catalog, the CIO should take stock of the utilization rates for the software and hardware in place, and transform IT's chargeback model.

Learn more in "The road to agile IT runs through IT services management and PPM [project and portfolio management]." Also:

  IT vendor management and cost cutting
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The economic downturn is still providing strong incentive for CIOs to practice vendor contract management -- and there isn't a contract term or condition that isn't immune to some nitpicking: Does the cost-of-living or inflation-rate clause in that outsourcing contract still represent what I should be paying for labor? Does that currency conversion clause need adjusting?

Staffing augmentation labor rates continue to be targets of cost savings for CIOs -- as seen by such questions as the ones above.

"CIOs are saying, we've looked at our labor contracts, now let's have a closer look at what else we can do with our other vendor contracts or software maintenance contracts; and [they] are willing to look at it clause by clause, and term by term," said Christine Ferrusi Ross, an analyst at Cambridge, Mass.-based Forrester Research.

Also under way are efforts to consolidate vendor contracts and software licenses across business units to get better pricing and eliminate contract redundancies. In other cases, enterprises are opting to eliminate aspects of their contracts completely.

Learn more in "Vendor contract management key to cutting costs through renegotiation." Also:

  2010 IT spending
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The Wall Street crowd, buoyed by bailouts and record bonuses, might be ready to spend again, but CIOs don't seem inclined to go on any technology spending sprees in 2010, our annual IT Priorities Survey of senior IT executives and managers shows.

With two-thirds of the 171 respondents facing flat or declining IT budgets this year, CIOs and senior IT managers remain focused on technologies and projects that mitigate risk, boost efficiency and reduce IT costs. For example:

  • Compliance is the top management initiative for 2010, cited by 33% of respondents, followed by business process automation (29%) and data retention and lifecycle management (26%).
  • Disaster recovery/business continuity is the most likely infrastructure project to get the go-ahead this year for 53% of our respondents, followed by server virtualization (43%) and Windows Server 2008 (26%).

The widespread migration to the cloud we've been reading so much about? That isn't happening for CIOs in 2010, with only 12% of respondents likely to implement an internal cloud this year, and a mere 8% planning to work with an external cloud computing provider.

Learn more in "CIO technology spending focused on reducing risk, boosting efficiency." Also:

  More resources
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This was first published in March 2010

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