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I was reading a story on Businessweek.com the other day about how the IT staff at British Airways helped the airline save more than $3 million by working for free or taking unpaid leave to help the company cut its costs. The story caught my attention for a couple of reasons.
For starters, the IT staffers who cut back on their hours or worked for free did this on a voluntary basis, according to the article. Given the airline industry’s financial troubles, they probably don’t have much choice.
At many other organizations, IT workers wouldn’t have been given any choices. For the past few years, I wrote the overview piece for Computerworld’s Annual Salary Survey report. For these assignments, I spoke to dozens of IT workers in a variety of roles from a cross-section of industries about their likes and dislikes about their jobs.
Generally speaking, most of the people I spoke to complained that they had to work longer hours and take on additional responsibilities as their IT departments continued to shrink and the work was spread out among the remaining staffers. Most of the people I spoke to had reluctantly accepted that the eye-popping bonuses and whopping salary increases that occurred during the heyday of the Dot-Com boom had since been supplanted by meager raises which aren’t keeping pace with cost-of-living increases.
But there was another aspect to the Businessweek story that was thought provoking. BA CIO Paul Colby is quoted as saying that the company has cut the amount of money it will invest in new IT projects this year by a third and stopped the deployment of an integrated ERP system, at least for now.
Colby goes on to say that the current ERP systems are “fit for purpose.”
That may well be. And it’s altogether possible that it doesn’t make financial sense for BA to invest heavily in an ERP integration effort at this time. But it’s also a reminder that when the going gets tough, far too many organizations cut back on strategic IT projects that are designed to help their companies to grow revenues, improve productivity or gain competitive footing in the market.
The best time to invest in IT is during an economic downturn, says Howard Rubin, a Gartner fellow and principal of Rubin Worldwide, a technology economics research firm. That’s not to say that organizations should increase all of their IT spending during a recession but it is an opportune time to make tactical or “surgical” investments to help create gaps with competitors, says Rubin.
According to Rubin, companies that have the most optimal technology intensity -- the best mix of IT investments to grow and protect revenues while reducing and avoiding costs at a managed level of risk – typically outperform their peers by 3%-to-5% of their pre-tax profit margins.
Which end of the spectrum would you place your organization?
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