Gartner warns CIOs to prepare for a 2nd global downturn
By siliconindia   |   Wednesday, 14 July 2010, 23:16 IST   |    6 Comments
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Gartner warns CIOs to prepare for a 2nd global downturn
Bangalore: Pointing to the risk of debt that the nations incur by default, the research firm Gartner has warned CIOs to begin preparation for a second recession within the next 12 to 18 months. Since there is so much uncertainty about the sustainability of the current recovery, CIOs are being expected confront this period with decisive action. The analyst firm has suggested they should augment current near-term plans by preparing for a second recession. "Just the potential for a second business downturn should be sufficient to compel CIOs to plan for another business downturn," said Ken McGee, Vice President and Gartner fellow. "However, most CIOs will not have a response strategy prepared if a second business downturn occurs." According to Gartner, CIOs in 2010 have one advantage over their predecessors, most of them possess practical experience dealing with a recession. This experience should help CIOs proactively prepare for a possible economic downturn in the next year and half. The analyst firm has recommended that CIOs must consider taking the following actions to ensure that their enterprises are ready to weather potential financial turmoil. Most official national recession declarations are announced well after the actual start of a recession. IT leaders should suggest that their enterprise executives convene now, so that business downturn response guidelines may be established before capital markets, customers, suppliers, creditors, etc. panic in the wake of bad economic news. To save money as quickly as possible in the event of another business downturn, CIOs should work with executives to determine which IT projects scheduled and approved under the current IT budget may be postponed and which may be entirely canceled. Once all projects for 2011 are identified, simultaneously determine which of those 2011 projects are relatively expendable and, therefore, may be postponed and which may be canceled, should deteriorating business conditions warrant such steps. As CIOs begin preparing for their 2011 budgets, they should consider suggesting C-level executives that all business unit executives sign documents affirming their understanding of the one-time costs that will be incurred to implement their 2011 projects. The affirmation should also include the annual recurring costs required to maintain those projects once they are completed. Finally, CIOs should compile an inventory of existing applications that are maintained by the IT staff and assign a reasonable estimate of the annual cost incurred to maintain each application. Gartner has further recommended that the business unit executives should sign a document confirming their understanding of the estimated annual cost for overseeing and maintaining their applications.

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