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Combating the Slowdown : Ideas By CIOs for CIOs

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PCQ Bureau
New Update

We all know that the entire world is passing through an economic crisis, and

how organizations are doing cost cutting like there's no tomorrow, just to stay

afloat. It's also a known fact that technology can help in these times. To find

out how it's actually helping, this time during the Best IT Implementation

Awards process, we asked one simple question to all the CIOs-to tell us one idea

that they've adopted, which is doing wonders or is likely to do wonders for

their organization. So from the 125 or so detailed audit forms we received, we

managed to pull out quite a few good ideas. While we would have loved to cover

each idea separately, it would be beyond the scope of the magazine. So instead,

we've analyzed all the answers and summarized the key take-aways from them.

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Slowdown is an opportunity



The most important take-away we got from all the ideas is that a lot of

organizations are viewing the economic slowdown as an opportunity in disguise to

explore new avenues for expanding their business. They're improving their

existing processes, reducing costs, and improving efficiencies-so that when the

good times return, they'll be in a better position to leverage it. In fact, some

CIOs even felt that there are ample opportunities in the market for good ideas,

and for quality delivery of products and services.

Anybody who offers these won't feel the pinch from the slowdown.

Another important fact that's often missed out is that this is also the best

time to invest in new technology. That's because prices for everything are at an

all time low, and you can negotiate even further to close some great deals. This

is also the time you can get cheaper funds from banks, as one of the project

heads pointed out, especially in the micro-finance segment. So organizations

with deep pockets or from growing industries can reap the benefits of such

deals. The others would have to find smarter ways of doing things, and hone

their negotiation skills to get heavy discounts on IT purchase. The motivating

factor here is that those who invest now would be in the best position to reap

the benefits of their investments later.



It's also a time to increase non-monetary activities like partnerships with
other organizations, better collaborations, etc. These could help you improve

your reputation in the market, increase visibility, get more branding, etc.

Besides external partnerships, organizations are also looking at consolidating

their internal business lines to harness synergies and redeploy resources to

emerging areas based on changing business cycles. Some CIOs have even requested

all departments to give priority to internal IT services instead of outsourcing

work to external agencies.

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Cost control is the mantra for most organizations. Optimize all resource

usage and automate processes to reduce costs wherever possible. CIOs are

watching their projects more closely than ever before to ensure that they don't

over shoot costs. Both CapEx and OpEx are being monitored and controlled. Doing

more with less is the new slogan making rounds in a lot of organizations.

Organizations are trying to conserve cash without compromising on quality of

service, which requires one to differentiate between 'nice to have' and 'must

have'. All solutions being considered for deployment are being linked to

revenue.

There's also stronger emphasis on measuring IT expenses over long term, with

proper TCO and ROI calculations that are guided by organization's business

needs. All technology investments are being measured by the ROI they provide.

Many organizations are even worried about their power consumption, and are

therefore taking measures to save electricity. For instance, one of the

organizations is displaying "SOS" Flyers, and putting up "Switch Off Something"

posters so that people learn to switch off lights and fans before leaving the

premises.

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Some organizations are even managing to increase their topline, control their

costs, which in turn is giving them a much healthier bottomline. We're sure

others would love to find out how to do that.

People management



Measures to combat the slowdown don't start with downsizing. In fact, we didn't
hear that word from any of the project heads. Rather, we heard very encouraging

suggestions on how to manage people. Many CIOs believe that they need to keep

their teams self motivated and committed so that they work with you for long

run.

This is a difficult job, but a lot of organizations are attempting to get

their employees to work more for less. They're being quite honest about the

slowdown and its impact on the organization, so that the employees understand

the situation and help their organization to sustain in these hard times.

Moreover, many are creating opportunities to upgrade the skill sets of their

team members and helping them imbibe a feeling of ownership towards the

organization.

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Recruitment freeze has of course happened across most organizations. So, one

alternative that's being adopted is optimization of manpower over multiple

projects to prevent layoffs. This way, the same team is spread across different

projects, till market conditions improve and allow for recruitments to happen.

Moreover, by using multi-skilled smaller-teams for projects is obviating the

need for high-end expensive resources.

Another thing being practised is to empower front line leads and managers to

innovate within their sphere using tech and tools, and domain processes to

improve efficiency or cost reduction. The company followed this practice saw

results in terms of some of the complex processes that required highly skilled

resources being transformed into a chain of simple processes that could be

accomplished by resources with normal skills. This helped the organization

remove dependency on scarce high skilled resources. This in turn helped the

organization to get the right priced services to customers.

Some organizations are doing better route management for their sales team. So

one organization has combined smaller routes into a single one, so that one

salesperson ends up covering multiple routes in one go. This allows better

coverage with the same manpower.

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Why should you only look at internal manpower? Some organizations are even

helping their customers apply innovative methods to improve productivity, reduce

costs, increase efficiency, and reduce cycle times. That would also be a great

way to establish better relations with your customers. When it comes to vendor

management, there's only one word that resonates across: Re-negotiate. Most

vendors would be willing to provide you all the support you need. If not price

reduction, you could negotiate a better deal for the same price. Just like you

don't want to lose your customers, your vendors don't want to lose you.

Technology to the rescue



Most project heads are relying heavily on technology during the slowdown.

Several of them want to invest in technology while the economy is sluggish, so

that they can drive better returns when better times return. Moreover, this is

also the right time to buy technology because you would get the best deals now.

Some of the technologies being used are well known-VoIP, video, and web based

conferencing to reduce travel costs (which could run into lakhs of Rupees),

virtualization and consolidation of servers and storage to reduce device

clutter, save power and real estate in the data center. In fact, some

organizations were so impressed by virtualization that they've decided to

migrate their entire infrastructure to it. Some other CIOs feel that

implementing business apps like CRM, SCM, SEM and SRM can have a significant

impact on both top and bottom line.

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Open Source adoption amongst Indian enterprises seems to have increased post

the slowdown. In fact, some organizations are taking bold steps to use Open

Source software in areas like Enterprise Content Management, Business

Intelligence, and Digital Assets Management. Others are simply increasing their

usage of Open Source software.

Paper and printing are a significant cost to every organization. One solution

is to look for ways of reducing paper wastage. One organization has setup an

Intranet/Internet based centralized application for digitizing workflow to have

a paperless office. Files would be captured at source and their movements across

the office will be tracked thereby reducing the paper requirement and footprint

required to store it. Not only that, but this organization also realizes that

paper can't be completely eliminated from the office. Therefore, they've

developed a special ECOFONT, which can reduce usage of Toner/ink by 20%.

Besides new technology, some organizations are leveraging investments already

made in their IT infrastructure, such as their ERP implementations. For

instance, an oil company is using its existing expertise in the oil domain,

combining it with their skills in SAP applications and doing implementation

consultancy projects to earn revenue for the corporation. This organization is

also using web services to cut done the operational cost. When there's talk of

using tech to save costs, then a discussion on green IT becomes pertinent. There

are organizations deploying technology to reduce the carbon footprint, conserve

energy and minimize wastage-replacing CRT monitors with energy efficient LCD

ones to reduce power consumption, replacing conventional servers with Blades,

and of course by using virtualization and consolidation.

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Another interesting cost cutting measure is to use the mobile platform to

reduce real estate requirement and hardware requirement at the back office.

There are organizations that have been significantly impacted by the slowdown,

such as the financial services or private life insurance sectors. This is

driving them towards largely untapped rural areas where there's tremendous

potential for sales. The rural business has its own set of technological

challenges largely centered around availability of the network to conduct

business operations effectively. One insurance company has adopted an offline

suite of applications for various activities such as receipting, contract

creation and client creation. This facilitates smooth running of operations from

rural areas with a server/local model with simple uploads into the centrally

located database through various upload tools.

The Indian Govt. departments are using technology to reduce cost in

transaction-based services like paying taxes, obtaining licenses, providing

information to the public, etc. If all of these are done online, then it can

result in significant administrative cost reduction for governments. The online

facilities can also enable better personnel utilization, allowing more focus on

citizens who require more personal attention. The delivery of digital services

that can be accessed 24 hours a day, 7 days a week from home, the workplace or

even the street, also provide convenience to the public.

Business Intelligence software is also being used for cost savings, because

it can provide real time MIS and analytical reports for faster and accurate

decision making.

Unified Communication applications are also being used for specific business

goals and requirements. For instance, one call center is using it for offering

better customer service, improved and a more blended interaction, improved

workforce productivity, and more streamlined and optimized collections. This

call center feels that UC apps are much better than previous generation,

proprietary, siloed and hardware-intensive computer telephony integration (CTI)

architectures. They feel that maintenance costs can be reduced by 20% and

productivity improved by 10% by using unified communications applications.

Inhouse development versus buying commercial software is another option being

considered. If you have the right skill sets inhouse, then you could save

significant costs by designing your business applications inhouse. One

organization saved 2-3 times the cost that they would otherwise have paid if

they had purchased a readymade commercial application. Moreover, designing apps

inhouse gives you more control over the processing power that would be used. So

you could avoid unnecessary processors, thereby reducing hardware cost.

Moreover, application software design could be done in such a way that the

necessary expertise is abundantly available in the market.

Other technologies being used are MPLS VPN to reduce bandwidth cost, and SaaS

to cut down on the CapEx.

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