Five CIOs talk about managing IT costs in a weakened economy

December 30, 2008, 3:23 PM — Because of the current economic slowdown, which many expect to last through 2009, CIOs are faced with some hard choices when it comes to investing in IT. And they're cutting or delaying projects and not investing in new technologies that aren't increasing revenues, creating business or boosting operational efficiencies.

ITworld asked five CIOs in various industries to discuss how they're planning to weather the softening economy and balance the needs of the business with shrinking IT dollars; what three projects they're currently doing or plan to do over the next year; and what projects have fallen off their lists completely because of the economy.

John Halamka, CIO at Boston-based CareGroup Healthcare System, CIO and Dean for Technology at Harvard Medical School, and a practicing emergency physician.

2009 will be a challenging capital year. We will have enough to keep the trains running on time, to ensure our disaster recovery efforts continue, and to remain compliant with all our regulatory requirements. We're limiting major capital purchases, extending timelines, and focusing on the highest priority projects and we will refine and improve what we have. Eventually, the economy will improve and we want to be in the best position when that occurs. I believe that economic challenges are good for IT organizations because it forces customers to prioritize their projects, matching their demands to limited IT resource supplies.

First I want to focus on compliance. In healthcare there are always elements, projects and software that are always 'must dos' because they're compliant. So you do those and usually you can do those in phases [as long as you] make sure you're showing demonstrable progress.

I work really closely with the business owners because the CIO really doesn't make the priorities of the organization -- maybe I prioritize infrastructure and compliance things but the CFO, the COO and in my case, the doctors and the nurses, they decide the very few 'must have' projects to make sure we're delivering safe, quality care.

I also want to focus medication reconciliation, which means we're hooked up to nationwide e-prescribing networks like SureScripts-RxHub, so that we and the hospital have an accurate history of every medication that has ever been dispensed by a pharmacy or has ever been paid for by an insurance company for each patient. There are not only compliance incentives to do it, but Medicare is offering incentives to use e-prescribing this year. So when the docs say, 'We want quality and safe care and we want to do what is dictated by our various government payers and local payers,' medication management is a really high priority project.

As I look at the sources of harm that can occur at a hospital, one of the things I want to do is make sure all of the patients and medications are positively identified with bar codes or RFID chips, so you give the right medication to the right patient at the right time. We're doing a lot of bar code and RFID work. We're also tagging our equipment with RFID tags so you can locate them really rapidly.

And we're going to extend the life of our desktops to six years. Most of our applications are web-based so if you run a web-based app on an older desktop, do you really notice? So we just say leave that hardware out there, replace it if it breaks and the web browser will still work. We'll also go slower on maintenance and infrastructure like network components or storage components or server components where I can get away with it without causing downtime.

Phil Go, CIO of Barton Malow Co., a Southfield, Mich.-based construction services firm

Obviously in the business we're in, the credit crunch probably is what hit us the worse and we're feeling it now, where six months ago we were still fine. And the commercial construction industry has been going strong for a long time and we feel the effects of the economy much later than most people do. It has been affecting us over the last two or three months.