Looking beyond the recession

By Danie Vermeulen and Kimball Fink-Jensen | Monday, July 20 2009

It is imperative for CIOs to ensure they don’t get caught up in short-sighted, knee-jerk reactions, but instead support the business strategy going forward.

In a downturn the CIO’s role moves from the status of important to critical, as you examine the cost drivers and ensure you work with CEOs and CFOs to prioritise investments. Are you doing what you need to do to ensure your organisation’s survival?

The CIO has an important role to play in an organisation at the best of times, to ensure the smooth running of the IT and communications machine. In current recessionary times however, the role of the CIO becomes essential for an organisation to survive.

In the last year, the information needs of your organisation would likely have changed from a sales and market orientation to a cash and cost orientation. The upgrade path for servers and other technology infrastructure may have been thrown out the window, as the pressure to limit capital expenditure has risen. That latest upgrade, new application or planned IT project also suddenly looks less affordable. Despite this, the front line needs to be more competitive than ever, which rests on information being delivered even faster.

So how does the CIO manage in these times to not only survive the current pressures, but to help the organisation to actually enhance its position through the recession? How can CIOs ensure they don’t get caught up in short-sighted, knee-jerk reactions to the economic downturn, but instead support the business strategy?
It’s achievable through a different mindset where the focus is on productivity of resources, efficiency of equipment and adherence to processes. Consider how you would answer the following questions:

• Do you have a robust, holistic, strategic framework that makes it clear to everyone how your systems will support your business direction and KPIs?
• Do your reports highlight how efficiently the organisation’s technology investment is being used?
• Do non-technical staff really understand how to get the most out of the tools you have provided for them?
• Is it really necessary to invest in that next piece of new technology, or is the opportunity there to get much more out of what you have already?
• Is communication between your team and the rest of the organisation as clear as it can possibly be?

In our experience, there are common issues that typically exist in organisations and prevent the information technology function from performing well. While the current recession is exposing these issues, in reality they were there all along and are simply now more evident and pressing to deal with.

So our recommendations remain the same as what we were advising CIOs before the recession. This means if you get your head around them now, you will help your organisation to survive and you will have put it on a firmer footing for the future.

• Find out for yourself what is happening at your workplace: We call this ‘Going to Gemba’ or going to the place where the work happens. Spend time everywhere where the information and technology you are responsible for is being used. Find out what people don’t like about it and work out what you can do to make it better for them.
• Learn what the cash-to-cash cycle is for your organisation: Cash is king right now and the CIO has a real opportunity to deal with it. The information that reveals where cash is slow to pass through the system is in your hands. Is inventory too high - which products? Are purchases occurring that are not necessary as stock or orders already exist for those products? Are debtors slow to pay - which ones - how much slower - are they being reminded? Are statements automatically sent out? What can your systems or your business analysts do to better help with these issues?
• Provide only what your ’customers’ want: Usually the customers of the information and technology teams are other internal people in the organisation. But that doesn’t mean your team should do anything other than understand their needs and provide them exactly that – not what you think they should be asking for.
• Standardise your processes: The information and technology teams should work to processes and standards in the same way that a manufacturing or service team should. This may mean your team has to learn about doing things in a more transparent and repeatable way. Yet the brief time spent creating these standards will be paid off many times when they (and you) realise how much easier it is to consistently do the same thing (much like following a recipe), rather than each time expending resources to make it up. It will also improve flexibility as standards allow more people to learn to do the same things – fewer experts and more generalists”.
• Continuously improve (KAIZEN) your processes: Having had your team develop the standardised processes that cover what they do, get them to work on continuously improving them. A newly implemented process improvement is simply the beginning of finding the next opportunity for doing the job better. As a general rule, we all know that it is always better to fix your business processes before implementing a new system.
• Respect your people and the others in the organisation: People are the key to getting things done – technology is a tool to help them. Listen carefully to what people are telling you and make sure you get out of their way as they fix and improve things. The best manager is one who makes it easy for the team to do their jobs.
• Work out how you can get more from your technology: People frequently complain that the technology is slow or they are spending a lot of time waiting for things to happen. Yes that may be true, but the real reason is often their own behaviour with that equipment or application. Too many applications in resident memory, inappropriate use of one tool when another should be used, etc. Before simply investing in more powerful equipment, examine employee processes and skills in using the existing equipment.
• Work out what more your customers can get from your technology: The understanding people have of the technology you have provided for them, decreases rapidly the further away those people are from your team. You would be surprised (or perhaps not) at how little of the true power of the tools is actually utilised by staff when they work. Microsoft Excel is a case in point – it is incredible the number of times we have seen people undertaking analysis that is slow and dangerously unreliable, because they don’t know even half a dozen simple yet powerful techniques for using the tool. Train them!

Working through these issues and honestly reviewing how your organisation and your team behaves and performs in these areas needs to be done soon, in addition to reviewing your IT portfolio and assessing the risks associated with any postponing of projects. Then you can find ways to improve the situation. You will not only have helped your organisation to survive, but will have improved the underlying platform significantly and have a great base for efficient and effective expansion when the next upturn arrives.

Danie Vermeulen (dvermeulen@kaizen.com) is the CEO, and Kimball Fink-Jensen (kfinkjensen@kaizen.com) is a Principal, for KAIZEN Institute New Zealand, which focuses on lean management practices in the areas of quality, costs, logistics, staff motivation, safety, technology and the environment.