There have been some postings on this subject recently “Managing IT in a Recession” by Thomas Wailgum and “IT Budgets Frozen by Recession, Survey Shows” by Denise Dubie in Network World  as examples, but I think we need to consider this recession (if we're actually in one after yesterday's market rebound of over 900 points on the Dow) as an opportunity.  The extent to which these potential opportunities can be acted upon will depend on how the CIO is viewed.  Is he or she part of the inner circle of the CEO and CFO and viewed as a strategic thinker or more of tactical player on the team.  For the tactical players, I'll address their opportunities first.

There maybe, though I think more likely are, significant possible cost savings within your IT budget.  Moreover, these cost savings are not from the reduction of staff but represent reduced vendor charges and enhancements to your IT architecture.  One of these areas for potential savings that I've discussed in the past on several occasions (“Evaluating the Alternative Desktop – The Time Is Now!!!” and “Pursuing An Open Desktop, Why Not!”) is taking a serious look at alternative desktops.  It has been estimated that the cost of upgrading all of Microsoft's software on the desktop could easily eclipse $1,000 per desktop.  This includes costs driven by the required software upgrades such as remediation of applications for Vista, new desktop hardware and employee re-training costs, in addition to the licensing costs from Microsoft.  Initiating a project to evaluate an alternative desktop such as Open Source or Google Apps can generate savings in several ways.  First, you might find that you can eliminate all Microsoft software on the desktop through an Open Source offering such as Novell's SLED 10, a comprehensive Open Source desktop solution.  Second, you might want to pursue a mixed environment that eliminates the most costly elements of a proprietary desktop.  This could include implementing Open Office as a desktop productivity tool or evaluating Google's e-mail and application offerings.  Finally, seriously initiating such an investigation will most likely cause Microsoft to become more competitive with it's product offerings and most importantly pricing.  No matter which course one pursues, I can almost guarantee that significant savings will be identified and captured by your organization.

The other opportunity in this area addresses the cost savings that can be produced through simplification of you computing and network architecture and incorporating new virtualization strategies.  There is clearly an opportunity to reduce hardware costs with the unknown being the pricing strategies of key software providers such as Microsoft and Oracle.  Here again considering a strategy of moving to Linux and Open Source solutions along with virtualization of your computing environment might be an option to consider and to highlight in your negotiations with current vendors.

Now let's consider the strategic application of technology to your organizations.  Here are some examples of opportunities to fundamentally transform organizations that I have observed as a CIO.

In publishing, a significant cost of producing the product is referred to as the manufacturing costs (essentially printing the newspaper, magazine or book) and the distribution of the product to the customer.  What if the cost of producing and distributing the hard copy product could be totally eliminated through software and the Internet.  This would obviously be a massive transformation of the publishing industry.  Circulation would have to reconsider many of their basic premises along several dimensions.  First, the product could be

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