Each year, we lay out our strategic plan for IT. Once the year starts, the plans start to change. We can't always anticipate how changes in technology will change our projects, plans and schedule. On top of that, our internal and external customers are constantly changing their priorities, likes, dislikes and initiatives. So, I have trained myself to lay out a general plan but also have the IT governance and market intelligence processes in place to make sure that I am adapting as needs change.
As 2009 draws to a close, I pulled out my original plan for IT in 2009 and compared it with what we actually did. We were not even close: 2009 became the year of IT cost management. We stalled projects, delayed projects, renegotiated every IT contract we could find and tried to hold our own. But working our cost structure was not our only priority. We knew that eventually things would turn around, and we wanted to come out of the downturn with improved capabilities. I focused on staff development, process improvements and a few skunkworks projects that will pay off once we can scale them up.
So, with that as an introduction, here are the lessons I learned in IT in 2009:
The best thing I did was to empower my team to take on the IT cost management challenge. I had some really good ideas as to how we could better manage costs. But, instead of mandating, I gathered my staff members and challenged them to find ways to reduce our operating costs by 10% without reducing IT service levels. I then left the room. A short time later, they emerged with ideas that were much better than mine. In fact, their ideas were so good that we reduced costs by more than 10% and actually improved service levels.
There is no substitute for having strong relationships with my business peers. At no time in 2009 did my internal customers come to me and ask us to do something different or to cut more costs. We have always made a conscious effort to build strong working relationships with them. Because they know who we are and that we have credibility, they assume we are already doing the right things and don't need their advice or interference.
Telco companies are completely incapable of sending an accurate invoice. In 2009 we renegotiated our network contract, increasing bandwidth to all of our sites while reducing costs by 60%. Imagine my surprise when the first invoice was priced at 11 times (yes, 11 times) more than what we had negotiated. The provider had not applied any of our discounts. It had charged us for installations that it did not do. It charged us for equipment we did not have. There was not a single line item that was correct. We sorted through the errors and I calmed down -- until the next invoice arrived. Once again, it was all wrong. So, I notified the provider that it was in breach of the contract terms. This finally got its attention, but it begs the question: How can an entire industry be so inept at billing? We constantly find errors in our landline bills, our cell phone bills and our long-distance bills. I think the first provider that does not stink at invoicing can turn that into competitive advantage.
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It pays to keep incumbent IT providers on their toes. We have long done business with a small number of hardware suppliers. This year, we decided to explore other options. It turns out our incumbent IT providers were taking our business for granted. When we told the incumbent that a different IT provider had quoted us laptop and desktop prices that were, on average, 20% less than its premier customer pricing, it quickly revised our entire pricing schedule. To be honest, out of spite, I switched to the other provider. But I learned that I need to keep my IT suppliers on their toes.
It feels good to achieve personal goals. This was a good "bucket list" year for me. I met two of my long-term personal goals. First, Addison Wesley/Pearson Education published a book I wrote. Second, after a delay of 26 years, I finally completed my MBA. Now, the book won't make me rich and I don't expect the MBA to accelerate my stalled career. Still, I accomplished something, and that feels good.
Well, 2009 is behind us now and I think we are well-positioned for 2010 and whatever comes our way. It was a difficult year, but also the year that I think we did some of our best work -- ever.
Niel Nickolaisen is CIO at Western Governors University in Salt Lake City. He is a frequent speaker, presenter and writer on IT's dual role enabling strategy and delivering operational excellence. Write to him at firstname.lastname@example.org.