Why Consolidation Still Hampers CIOs

Gartner finally dropped the bomb that every one saw coming, announcing in late February that CIOs should start cutting costs. Gartner’s advisory reflects an increasing pessimism among tech sages about the impact of an economic downturn on corporate IT budgets.

The advisory laid out guidelines on how to plan for cost-cutting, but didn’t specify what to cut. That’s a decision CIOs will have to make, and that means taking a hard look at current investment priorities. Traditionally, emerging IT investments are the first to go at budget-cutting time, followed by staff cuts and, finally, ongoing projects. Our take is that smart CIOs will fight to protect the least-sexy, most frustrating investments around: big infrastructure integration and consolidation projects.

These endeavors often seem to take as long as building a pyramid and tend to cause severe headaches for IT managers along the way. Knitting together a company’s infrastructure requires CIOs to mess with their favorite toys—servers, storage, critical applications—and the bigger strategic concerns of cost management, alignment and data integrity. Funding can run out, and vendors and consultants can muddy the plan. It’s no wonder that CIOs lose sleep over these projects.

When budget cuts hamper consolidation efforts, they become even more challenging. As IT benchmarking guru Howard Rubin (Expert Voices, February 2008) points out, failure to spend up front on major IT initiatives can cost many times more in catch-up mode. The hard work pays off, too, according to CIO Insight’s annual IT spending survey, published in the February 2008 issue: Asked which tactics will provide the greatest IT savings, six of 10 IT executives pointed to infrastructure consolidation.

One reason integration is hard for CIOs: “They don’t approach it as an architectural problem—they approach it as a utility problem,” says Chris Curran, chief technology officer for Diamond Management & Technology Consultants. IT executives, he says, spend too much time talking to vendors and not enough working with architects. So the architecture-based discussions about service levels, usage and growth patterns are not happening often enough.

David Cappuccio, managing vice president at Gartner, points to what he calls IT modernization—the idea that architecture needs to be attacked strategically, not piece by piece. If CIOs view each piece as a project, it can lead to a domino effect: Change one piece, and others begin to topple. “It’s not a project—it’s something that needs to be part of the DNA,” Cappuccio says. “IT and CIOs have to look at it as a long-term project. And it scares the hell out of them.”