October 13, 2008, 9:53 AM — Economic uncertainty is driving CIOs to halt projects, freeze hiring and pile more responsibilities on existing IT staff.
High-tech has been known to weather economic crises better than other industries due in part to its role as an enabler to businesses. But the recent deluge of financial failures is causing enterprise IT executives to rethink expenditures in the coming months. For instance, a CIO Executive Board survey of 50 IT leaders in September revealed that 61% are re-evaluating 2009 budget plans, 59% are putting nonessential IT projects on hold, and 24% have introduced a hiring freeze in IT.
"For the average company, the trend is a lot of caution going forward. There is too much uncertainty around the bailout and the national election for IT leaders to be confident in new investments," says John Estes, a vice president with IT staffing and consulting firm Robert Half Technology.
This caution will translate into more work for existing network executives -- without any wiggle room in their budget or access to more personnel. The idea of donning multiple hats isn't a new one for many IT shops, but today's economy is changing what used to be a quick fix into standard operating procedure. (See related story, "How ITÂ pros can prosper despite economic woes.")
"Our operating expenditure budgets have been frozen and cut, and we currently have a hiring freeze in effect. There is an obvious direct financial impact to our institution when there is this amount of uncertainty in the market," says John Turner, director of networks and systems at Brandeis University in Waltham, Mass.
As a member of senior management, Turner says it's his job to align existing staff with emerging responsibilities. For instance, the need for storage administration at Brandeis drove Turner to assign additional responsibilities to a systems engineer and a database administrator. While other organizations may be able to create a new position based on the need to better manage storage, Turner doesn't have that option. But he says putting the work on existing staff can provide the IT professional some benefits.
"They are in the trenches and they are not removed from any bit of the technology, which is good in terms of broadening their knowledge and skills," Turner explains. "Plus when a systems engineer needs storage, in our case, he doesn't have to request the space; he can provision it on his own."
The downside is that IT at Brandeis has been operating on a tight budget for years, and additional economic stress further burdens existing staff and puts limitations on what IT can accomplish in the long term.
"Brandeis has not been graced with a large staffing budget, and the problem when you do things efficiently to start is that when a crisis occurs and there is a budget crunch, there is nowhere to cut from," he says. "The stress on staff is short term, they can only do so much work for so long, but long term the institution will suffer if we can't hire."
Get used to pitching in
James Kritcher says his organization in the past 12 months has retracted requisitions for additional personnel as a result of the business climate. As vice president of IT at White Electronic Designs in Phoenix, Kritcher personally pitched in to head up the company's enterprise risk management (ERM) program.
"Certainly one factor in my assumption of these tasks was a hesitancy to incur the costs of hiring a new person to perform them," he explains. "I had the knowledge and was willing to take them on because it will give me additional credibility with my IT peers as well as the company's board."
One caution, however, is to not take on too much. Kritcher says he tries to approach additional work with realistic expectations and choose duties that seem a natural add-on to his primary responsibilities. For instance, his ownership of the company's ERM program evolved from his work in IT disaster recovery planning.
"You have to ensure your IT responsibilities don't suffer," he says. "Because as much as doing more work can help your credibility, if you don't perform, your reputation can take a hit -- even if you had the best intentions."
At Metrocorp Publications, IT has been asked for quite some time to put off non-essential projects such as desktop operating system upgrades.
"For the past six months, we have been asked to hold off on all investments that are non-essential to provide a cushion for the economic downturn our management expected would come," says Chris Majauckas, computer technology manager for the Boston company that puts out Boston Magazine and Philadelphia Magazine.
Since reducing an IT staff of two employees isn't feasible, Majauckas works to find ways around spending money -- even taking on mechanical and electrical assignments such as modifying cubicle design and rewiring the area for staff.
"Before I look to an outside vendor, I assess if I can perform the job and save the company a few thousand dollars," he explains. "It makes me more valuable to the company and hopefully if it comes to cutting staff, management will think twice about reducing my position to bring in a contractor."
If economic turmoil doesn't always force IT to cut budgets and slash staff, it certainly reminds them to eliminate redundancy in duties. Bruce Meyer, director of network services at ProMedica Healthcare in Toledo, Ohio, says his organization is currently consolidating functions performed on the voice and data side under his purview going forward. To date, the voice and data network engineers operated independently of each other, but as ProMedica rolls out voice over IP, the opportunity to streamline operations presented itself.
"No one is losing a job necessarily, but everyone is tight now so we are trying to get more out of the staff we have," Meyer says. "Consolidating this Layer 1 functionality -- a jack is a jack and cable is cable and it's all in the same closet now -- prevents us from having two people doing the same thing and adds more efficiency to our staff."
Others say the current economy simply shines a spotlight on how IT is expected to operate normally. For instance, a company looking to establish a director of business applications or manager of ERP systems might opt to reassign existing staff instead of hiring a new employee regardless of Wall Street's status.
"It's the nature of IT now to blend responsibilities and create dual roles in part because some of the technical capabilities can be applied across IT domains, but also because it simply doesn't make sense to spend [US]$80,000 per year to hire a full-time employee when you can get the job done by making that role one-third of someone's job," says Chris Holbert, CIO and COO at LaunchPad Communications in Los Angeles.