RSSAre we firing people here, or what?
The great thing about writing about information technology is that you can always find a controversy… and data to support your side of it. So, while last week I posted that a recent Goldman Sachs survey had indicated that many of you CIOs out there were considering "significant" decreases in staffing because of budget constraints, this week Larry Dignan is posting that a recent Merrill Lynch survey has indicated that many of you CIOs out there aren't considering any staffing cuts because IT spending will be up.
Part of this apparent discrepancy may be explained by the fact that Goldman Sachs is asking about 2009 plans while Merrill Lynch is asking about 2008. Although it may not seem that significant a difference, businesses are in a negative mood at the moment and are tempted to see the future as degrading. It's interesting to me that this should still be the case even when similar fears for 2008 have not played out (witness the relative optimism in Merrill Lynch's report, where respondents are forced to look at actual numbers from a year that is half over with and conclude it hasn't been so bad, after all)… is this more about attitude than planning? Or does it reflect a careful analysis of the fruition of plans laid this year which will automate departments enough to start wielding the axe next year?
That's only worth asking if you attribute much meaning to these surveys, which you probably shouldn't; I've filled out a few myself, and they don't get the larger percentage of my already diminished brainpower allocated to the answers. But on the whole, my gut tends to agree with the G-S conclusions that staffing cuts are inevitable. This despite the fact that headcount has traditionally been viewed as a mark of status in some management circles; CIOs are no less human than anyone, and the more reports they have the more impressive they sound at cocktail parties. But the industry is changing and you can do more with less, and that pressure has to catch up at some point. That being the case, we get back to the original question: are we firing people, or what?
Because the transition to that new future in IT is going to require some changes in perception among management. The CIO, to retain value in the eyes of bosses and colleagues, is going to have to re-cast the role so that the impressive things aren't the size of the organization beneath him or the volume of support tickets addressed, but instead the lack of support issues and the maximization of productivity with minimal headcount. I hear CIOs speak, even to one another, sometimes boastfully about the size of their department and the amount of trouble they have to constantly deal with, and it makes me cringe. That's nothing to brag about, in my eyes. If it somehow proves an ability to organize and manage at a high level, it also shows a failure to plan and maximize the application of technology.
Fortunately, Sam Diaz, on the same blog as Dignan, explains how some of these pressures are playing out already and forcing CIOs to reorganize and look at their departments from another angle. If the Merrill Lynch survey reflects an outmoded, dysfunctional perspective on IT headcount, at least there are signs that CIOs are beginning to understand the need to correct it.
Earlier this week I was provided with an interesting document titled:Increased IT security spending is up for Q3, out of all that money been invested, one must ask: will this money be invested in people? For their knowledge & skills?.If new solutions are purchased, who will implement them? Who will manage and support them? I wonder Scott, if companies are planning to cut it staff loose, could this not be because they are beginning to outsource certain functions externally, like for example in a situation where a company decides to rid them selves of the burden & mundane task of managing thier email facility and opt for a SAAS solution like Google Apps where they might not even have need for a Server, as its located outside of the company and managed by an outsourced vendor? Would it maybe not more correct to state that perhaps a company not specializing directly in IT – Is cutting IT staff loose & a company specializing directly in IT (outsourcing IT) – is hiring.
Thanks I would like to hear your thoughts.
Byron Graham
bgraham@groveis.com
Grove Information Systems
Postini & SAAS Wholesaler
Hi Byron, thanks for your comments. Two points: one, if you believe what the survey has to say about the matter, the internal staffing cuts are not anticipated to be accompanied by increased outsourcing. In fact, demand for outsourced solutions is also supposed to be low. So it’s unlikely that a higher demand for staff among SaaS providers would offset any layoffs by companies which are not specialized in IT.
Two, even if staff were cut in favor of outsourced solutions, those outsourcers would not be increasing their own staffing at the same rate. Part of what makes the solution attractive is the relative efficiency; the outsourcing firm can support many outside firms with a fraction of the staffing that each of those firms themselves would require to accomplish the same ends individually. The ability to share infrastructure and specialists ensures less demand for both. That’s why it often costs less to outsource.
Beyond that, my sense is that technology itself is finally fulfilling some of its promise to make processes more efficient. It simply takes less people to run a server farm than it used to, due to advances in management technology and reliability. That’s why I feel that staffing cuts are inevitable, unless somehow the market as a whole expands (not impossible, but seemingly unlikely in today’s economic climate).
Cheers,
Scott