Despite the current downturn, there are pockets of growth and investment spending in several key healthcare IT areas. I am seeing strong signs surfacing of CIOs shifting their focus to cost cutting initiatives vs. growth-oriented investments. However, current dynamics are dramatically different from the last recession.
….. Conditions within the IT industry are substantially different from the dotcom downturn of 2000-2002. IT does not represent the same attractive target it did in 2000... Considerable IT investment underpins business’ ability to “keep the lights on” so these investments cannot be cut or even quickly changed… New investment in technology is not optional, because businesses must harness information to create competitive advantage.
Source: Gartner, “Dataquest Insight: Impact of Economic Slowdown on IT Services Forecast”, February 2008 If the past recessions can offer a glimpse of what future has in store for CIOs, in a declining environment, CIOs’ focus should turn to one or many of the following:
- Delay long-term projects and lengthen technology replacement cycle
- Require immediate ROI
- Decrease capital expenditures
- Focus on enhancing existing systems & operational efficiency
- Renegotiate vendor contracts
- Renegotiate billable rates
- Staffing: freeze, delay or reduce headcounts
- Delay launch of new initiatives
While many CIOs have already been working on their technology investment priorities, I have three other ways that can further enable these efforts
A. Conduct an assessment to identify cost-savings.
Identify ways to optimize infrastructure spending and build a business case and transition road map to achieve this B. Simplify and consolidate computing and networking.
Reduce server operational management costs 30-70% by optimizing performance. Achieve consolidation ratios from 6:1 to 20:1 C. Virtualized IT to reduce costs and enhance performance.
Reduce application and energy costs with virtual desktops, hosted in the datacenter and accessed anywhere – estimated ROI of 30 - 40% per year.
What are your technology investment priorities?