Navigating Difficult Times

However long the economic downturn lasts, in most countries a long-term deterioration in government finances is already projected. HP Enterprise Services believes that government CIOs have to take a longer-term view at the same time as responding to today's immediate problems.

In this viewpoint paper, learn how HP believes that first, CIOs will have to restructure IT operating costs to fund investment in IT that enables business initiatives. CIOs should work back from a target cost that reflects where the business needs to be, not where it is today. Action is required quickly so that a virtuous, self-reinforcing cycle is established where IT costs are reduced ahead of savings targets so that funds are available for the next cycle of cost reduction. HP has identified the main cost levers and cost reduction strategies that will enable CIOs to reach the cost reduction targets that will typically lie in the 15 percent to 45 percent range over three years.

Having created more room for project spend, the second task is overhauling governance mechanisms to increase the business impact of IT project spend. This can be achieved by flexing delivery and procurement models, prioritizing projects based on Government Return on IT (GRoIT) and adopting portfolio management approaches that address the entire IT value life cycle.

Finally, the economic crisis is a highly disruptive event, in the face of which incremental change alone will rarely be sufficient.

CIOs will have to explore “disruptive” solutions – some will be new technologies, some alternative procurement solutions and others different business models.