2003 -- a CIO's guide
Published: 02 Jan 2003 12:57 GMT
During 2003, Gartner believes businesses should turn off at least ten percent of their legacy systems. These are not necessarily systems running on old hardware or software, but systems that do business in an obsolete way. The downturn is a good time to win the battle to remove them.
"Most organisations still have a very large portfolio of legacy systems," says Mahoney. He believes that switching them off is a very good thing to do in a recession, because it saves money and time, and produces a result on the bottom line.
This gives the CIO some clout over the business managers who are dragging their feet and demanding that old systems are kept going, simply because they do not want to update their own working methods.
"Companies have projects that haven't rolled out completely, because twenty percent of the management is still wedded to the old system," says Mahoney. "In a downturn, the CIO can over-ride their protests. The easy stuff has been transitioned, but not it is political. It is time to take away their teddy bears."
Even with this sort of argument, it will be tough going. Ten percent is a realistic target, says Mahoney, but one which will begin to create real paybacks which the CIO can show to the board.
Watch for suppliers to consolidate
During 2003, more suppliers will disappear through merger or bankruptcy. By now this has happened already to key suppliers for many -- or most -- enterprises, so the experience is nothing new. But it is worth underlining the need for contingency plans.
"Uncertainty is not a good reason not to be making buying decisions," says Mahoney. You need to get good value, and desperate suppliers can be persuaded to make good offers. If you are worried about the long term future, you need to have backup options for services (such as spare capacity or another service provider) or "escrow" for products, to guarantee that you will have access to them in the event of your supplier disappearing.
There is another option besides screwing good cash deals out of suppliers, and that is to go into partnership with them, as BT has done with its suppliers. This is an option for large organisations only.
Suppliers have been promising return on investment from their products for years, but all too often, the promise is never checked on. A year or two from the installation, the IT staff have changed, and the strategy is different.
BT is inviting suppliers to enter contracts where what they are paid depends partly on BT making demonstrable savings as a result of their products. In essence, the telco is offering to pay them extra, from the money it saves by using their products, but at a later date when the savings have actually come through. "We could knock another two percent off this year," says Paul Reynolds, chief executive of BT Wholesale, "but there are better gains to be made this way."
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