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Ten imperatives for midmarket IT strategy in the new year

From IT security and compliance to IT staffing and IT portfolio management, here are 10 maxims for success in the coming year, spanning people, process and technology.

What will 2009 bring for CIOs and senior IT at midsized businesses? Recently, I answered this question for some 400 CIOs at Microsoft's Midsize Business CIO Summit. Using recent in-house TechTarget survey data and drawing from conversations with readers, I built the following midmarket IT strategy top 10 list. Like your jobs, it spans people, process and technology -- and paints a picture of caution (but not drought) for the year ahead.

10. Review your strategic plan.

In a recent TechTarget survey, more than half of the 386 midmarket respondents said additional IT cuts were at least somewhat likely in the first half of 2009 if the economy didn't improve. And anyone who's been through cutbacks before knows that you rarely get a big window in which to make them. Thus, it's imperative to start evaluating your strategic plan now, so when your boss says he needs a 10% reduction by Friday, you've done the work to make the right choices.

9. Spend wisely, but continue to invest.

We've all heard the horror stories of companies that have frozen spending only to have critical system failures because IT couldn't replace aging systems, or at least found themselves way behind in infrastructure upgrades. Fortunately, as of our mid-September survey (conducted just before the financial meltdown, but at a time when the economy wasn't exactly surging), some 75% of you predicted you'd have at least as much money to spend in 2009 as in 2008. But if you do have to make cuts, 68% of you said nonessential projects would go first (no big surprise there).

There might be a larger issue: expenses you used to capitalize that now come from your operating budget -- namely, applications procured through the Software as a Service (SaaS) model. Our survey found that some 75% of respondents saw SaaS applications as somewhat or very vulnerable to spending cuts -- and that may be because of the budget they come from. (It also might be because you decide business users can live without that newer functionality that in an ideal world you'd give them via an inexpensive SaaS point solution.)

Either way, you need to make the argument for buying the technology you really need. Forgoing critical investments inevitably increases risk.

8. Ensure strong governance.

If you've successfully made it through steps nine and 10, chances are you already know all about governance. You have an IT steering committee or project management office where, together with business users, you evaluate the needs of the business and the merits of each IT project based on what it brings to the organization in terms of driving revenue, efficiency/cost savings and risk management. If you don't have such governance, now is a good time to go after it. Scarce resources raise the ante for choosing the right investments, and working in tandem with business leaders will only raise your profile and that of IT -- good capital to have if the ax does swing.

7. Drive efficiency (and not just in IT).

I'm going to assume that your IT organization is already as efficient as it can be, and focus here on your role in improving business efficiency. IT, with its horizontal view across all departments, is in a unique position to spot areas ripe for business process improvement. Every request for service indicates a business or employee need, a potential opportunity for process improvement that need not cost anything. Creating visibility through data is another approach -- if you can show that your company's cycle time or inventory turnover rate is below industry norms and suggest ways to improve it, you've just earned a lot more than your paycheck. Use process modeling, business process management tools, automation or business intelligence to prove your value and improve company performance.

6. Prepare for supply chain challenges.

Recently, the CIO of a midsized women's garment manufacturer told me his company had been asked to decrease its cycle time for producing spring fashions from 20 weeks to 12 -- a reduction of nearly a third. Heading into a slower economy, a designer wanted to hold off on placing an order, and the company had to scramble to react. (Moreover, this CIO predicted this new efficiency would become the standard once the company managed to do it for one customer.) While consumer-facing industries may face the most economic challenges at the moment, all of us should be prepared to adapt our processes and make data available quickly to work efficiently with partners and keep everybody afloat.

5. Don't forget risk.

Risk and security is nearly always top of mind among CIOs; indeed, among the top 10 IT priorities in the TechTarget study were three types of security projects (network security, identity and access management and endpoint security -- each with implementations planned for 2009 at about a third of respondents' organizations). In a challenged economy, disgruntled or soon-to-be-former employees pose more risk than ever, and crime tends to rise. So don't be caught unaware.

4. Figure out compliance.

A separate TechTarget survey, conducted in August and drawing 181 midmarket responses, showed that 70% of you see compliance as more important than last year and expect to spend more time on it next year. Yet only 48% of you have a clear understanding of the technologies involved in compliance, compared with 57% of your enterprise counterparts, and only 30% of you have staff dedicated to it. With the financial wreckage still steaming from the crash, more regulation is likely to emerge, so now's the time to make sure you have a compliance strategy and processes and technology in place to meet it, before things get even more complicated.

3. Take every opportunity to advance your skills in business strategy.

If your eyes glazed over when I mentioned inventory turnover rate and you work for a company that builds or distributes products, you have some homework to do. To fulfill your mission as the technology strategist for your business, you need to understand the levers the business owners pull to make money. Invite yourself to sales meetings, listen in on earnings calls (or those of public companies in your sector) and figure out what constitutes viability and success for your business. Only then can you contribute the innovation and process improvement that will advance your company in the year to come.

2. Keep your staff engaged.

The year ahead will be tough economically, so the fun new projects could go away, you could face hiring and/or salary freezes, and before long you could see your team members slogging into the office with their Thermoses of homemade coffee and bologna sandwiches. That doesn't bode well for organizational excellence or innovation, not to mention execution of all the other points on this list.

What to do? Besides communication and inexpensive perks (comp time, flex hours), find ways to keep people thinking. Schedule gadget days, user focus groups, guest speakers from other departments. Lead your team through any effects of the downturn by not only respecting what they may be feeling, but also by doing your part to push aside any collective despair and forging ahead.

1. Don't put your own career on hold.

That's right, watching out for numero uno is the No. 1 IT strategy on my list. Why? Because to take care of others, you have to take care of yourself, and your evolution as a leader requires constant self-evaluation. What else do you need to learn? What are you becoming more passionate about as time goes on? What can you bring to the business party that you're learning in other facets of your life? Can you bring or find what you need at your current organization, or should you start to look outside?

Even as the recession takes hold, executive-level hiring is continuing, as is the trend of CIOs taking on responsibility for other aspects of the business (facilities, security, compliance, among others). If it's time for you to take on more responsibility or embark on a different path, at least start the groundwork now. Like your team, your projects and your business, you'll be poised to flourish when the economy opens up.

Let us know what you think about the story; email: editor@searchcio-midmarket.com.

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