Making do is becoming, painfully, business as usual. No ones happy about it, but most IT pros are gearing up for 2003 with a plan to stretch limited resources—again—while waiting for the economy to shift out of neutral.
Some industries are more battened-down than others, with the landscape ranging from nuclear winter to temperate. Everywhere, however, IT executives say that big new projects are at least a year away.
"My vision right now is rather myopic, to be honest," said Jorge Abellas-Martin, an eWeek Corporate Partner and senior vice president and CIO of Arnold Worldwide Partners, an advertising agency in Boston. "Advertising has been hit pretty hard. ... Everybody is focused on reducing costs to the bare minimum so what little new business comes in can go directly to the bottom line."
Few IT managers or industry observers expected the recession to last this long.
"This time last year, people predicted a tough first half then an upturn in the second half. Obviously, that slid," said Fred Amoroso, CEO of Meta Group Inc., an IT research and consulting company in Stamford, Conn.
Amoroso said he agrees with predictions that the economic downturn will bottom out by years end and be followed by a gradual recovery.
Nonetheless, IT spending will trail the macroeconomic trend, Amoroso said. "In 2003, most companies will continue to see a decline in IT spending as a percentage of their overall budget." That decline is likely to be 12 to 15 percent, although, on an absolute basis, it will be only 5 percent, he said.
Amoroso said there is not much new activity in external spending—for example, on consultants, systems integration and major new projects, such as enterprise resource planning.
But initiatives that could save money are getting some attention. These include server consolidation; SANs (storage area networks), to centralize data storage; mobile computing; and, in the financial services industry, so-called straight-through processing, to streamline financial services transactions.
In addition, many IT departments are becoming tougher customers and looking to squeeze every penny out of the contracts they sign with IT vendors. In the background—with the Sept. 11 terrorist attacks in mind—is ongoing concern over disaster recovery planning.
Abellas-Martin said that Arnold and its parent company, Paris-based Havas, will soon achieve a significant savings by consolidating contracts for purchasing Intel-based systems. Its the sort of thing that was overlooked before times got tough.
"Before, we had Dell, HP, Compaq, Toshiba and IBM; now, its all Dell and HP, and were controlling the configurations. There are no more vanity items," said Abellas-Martin. "The Dell deal will save the whole company hundreds of thousands of dollars."
To increase billable hours, Abellas-Martin is looking to make Arnolds account executives more productive on the road. Hes exploring third-generation cards for Sprint PCS devices, for example. "Its all about getting more out of the people we have," he said.
The publishing industry, like its advertising cousin, has been hit hard.
"Capital budgets have been cut in half, but for the capital thats left, expectations are twice as acute," said Bill Godfrey, vice president and chief technology officer of Dow Jones & Co. Inc., publisher of The Wall Street Journal, in South Brunswick, N.J.
Even so, Dow Jones continues to invest in long-term projects. The financial news company is in the midst of implementing a corporate strategy its calling Business Now, which includes 10 major initiatives, according to Godfrey. A centerpiece of the plan, he said, is a new, $26 million advertising system for Dow Jones major publications.
The system will let advertisers use a secure private key to access accounts with Dow Jones. The system relies on Web services and Microsoft Corp.s .Net architecture, embracing technologies such as Simple Object Access Protocol and the C# programming language. It runs on Intel-based servers that use Microsoft operating systems.
The advertising system is being developed in partnership with Atex Media Command Inc., of Bedford, Mass., which is building the system according to Dow Jones specifications and will later sell it as a product. About 30 Dow Jones employees and some 100 Atex employees are at work on the project.
Business Now also includes a recently launched CRM (customer relationship management) initiative that mines data on subscribers to wsj.com, the online edition of The Wall Street Journal. Dow Jones is working with Booz Allen Hamilton Inc. to develop the business process redesign road map for the project, which is expected to start early next year. "Were starting with strategy, not with product," said Godfrey. "Were not working with big CRM vendors because we want objectivity—what is best for Dow Jones."
All this activity takes place against the backdrop of a major relocation coupled with a beefed-up backup strategy. In the wake of Sept. 11, the company moved its main operations out of Lower Manhattans World Financial Center and into offices in South Brunswick. During the summer, however, a major bureau was re-established at the gutted and refurbished World Financial Center. Meanwhile, a major backup facility was established in Secaucus, N.J., which also houses operations for wsj.com. Headquarters is once again in Lower Manhattan, although the majority of workers remain in South Brunswick.
An initiative to support reporters with advanced mobile technologies is also part of the mix. Using a Security Dynamics Technologies Inc. SecurID card, reporters can access a Web-based newsroom research system from anywhere in the world. "They dial the URL, and they have access to those [research] tools," said Godfrey.