Going into 2009, I spoke with a number of CIO peers, all of whom, like me, had flat-to-lower budgets and flat-to-lower headcounts. I told them, “Your customers are going to get amnesia. In the fourth quarter, they agreed to moderate expectations. Everything stays flat or goes down, but their expectations are going to go up in Q1—just watch.”

That’s the difficult reality CIOs like me are grappling with. We’re being told to do much more with less, but our bosses are expecting much, much more.

When we emerge from this recession, there’s going to be some interesting rearview-mirror perspective on how CIOs handled these tough times. In the meantime, I’ve learned some valuable lessons.

Luckily, I haven’t had to cut as much as other CIOs, but I’m still feeling their pain. Demand for IT services and capabilities hasn’t lessened, even though my resources have. On top of that, my data volumes are increased.

In other words, flat is not flat.

To make the most of this tough environment, I’ve focused on two big buckets: the run-rate business (the proverbial “keeping the lights on”) and innovation.

Over the past year or so—back to when we started seeing real signs of a downturn—we’ve looked at holding an “IT garage sale.” We looked at what we own and how we can optimize those existing assets and investments to make sure we’re getting the most bang for our buck. We would only spend on what was strategic.

Doing so addresses both of those buckets. My team and I had to re-evaluate the tools we’re using to keep the lights on. At the same time, we had to look for new ways to do things.

The idea of innovation is somewhat a matter of perspective. The mistake many CIOs make is to assume that innovation means using some new vendor technology or tool. But if I’m using technologies I already own and finding new ways to use them, then that’s innovation.

That’s not to say we’re not looking at doing new things. I’m building internal capabilities related to Wikipedia, YouTube and Facebook. I’m promoting video to reduce travel costs and time. Initiatives like those have helped boost our efficiency, and they have a welcome side effect: Our customers have been impressed by how we’re containing costs.

See main story: CIOs in the Era of Doing More With Less

Overall, we’re looking to make our data more fluid across different business units and processes. Why do so many companies have the same processes, but some do them better than others? It’s all about how they manage data.

In 2009, we are focused on two main initiatives. The first is upgrading our company hub to a full-fledged master data management (MDM) strategy for both our company and contacts. We believe we can create a sustainable competitive advantage by knowing who we can potentially do business with, and already do business with, better than any other software company. The second initiative is to make this information readily accessible to the right people at the right time.

I’ve also tiered vendors based on who’s most and least important. We must look closely at what technologies and tools are a “must-have” versus a “nice to have.”

But overall, those tactics are just part of the battle.

I believe the greatest indicator of how well CIOs have done through this crisis is determined by whether or not they’ve kept their job. In my opinion, keeping your job has as much to do with managing expectations as it does the actual execution.

In my world, I must innovate regardless. Other IT shops may have been cut so far that there’s no room left for innovation, but keeping the lights on is just good enough.

The challenge comes when there’s a mismatch of expectations. I find that most of our customers are reasonable if you communicate and manage expectations. This becomes particularly challenging when, year over year, you’ve been executing. Last year’s execution becomes the standard for the IT team, even if the team overextended itself to meet its deliverables.

For the new-world CIO, one of the most important skills to possess is selling skills. If it fits you better, you can call it “influencing,” or “partnering.” For me, the term “selling” works—we must sell every day to keep the expectations in check.

Tony Young is CIO of Informatica.

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