A Primer for Surviving a Recession

Posted by Pui-Wing Tam

Whether the U.S. will experience a recession or not remains uncertain. But technology research firms are already giving tutorials to chief information officers for how to prepare and live through an economic downturn.

budget Earlier today, Forrester Research held a teleconference to advise CIOs on steps to take in case a recession hits. The research firm was quick to say it isnt predicting a recession, but added that it has lowered its outlook for U.S. tech investment to 4.8% this year from 5.3% previously.

So whats a CIO to do? Here are some practical tips from Forrester:

1) Keep track of whether or not there might be a recession by following nonfarm payroll employment numbers and gas prices. If there are two or more months of declines in nonfarm payroll employment numbers and a sustained jump in gas prices to more than $4 a gallon at the gas pump, then get ready to deal with a recession.

2) Start reviewing your information-technology portfolio and identify pieces that can be postponed, cancelled or cut. Then calculate potential savings from such actions and also document the risks of making any of cost-cutting moves.

3) Make your companys chief financial officer your partner during this time.

4) The most obvious savings in IT will come from delaying tech upgrades such as a rolling out new desktop computers and stopping new IT projects entirely. The next most obvious savings will come from projects such as accelerating an IT consolidation and freezing new hiring. But make sure you know the risks: Some of these actions could lower morale and productivity.

5) Avoid picking off low-hanging fruit like eliminating time and support for research and development and cutting staff who worked on the most aggressive IT projects. CIOs will need all of those elements later, for when an upturn comes.

Its very important that a CIO be thinking long term as well as short term, says Andy Bartels, a Forrester analyst. Dont overreact.