- The coronavirus is hammering businesses of all sizes and
sending executives scrambling to map out strategies to mitigate the
impact of the pandemic.
- CIOs have the difficult task of keeping digital overhauls on
track, while making sure the workplace can continue running in the
new, all-remote reality.
- Many top corporations turn to Apptio for help with both. The
software company born right before the Great Recession helps manage
over $400 billion in global IT spending.
- “It’s a pretty surreal time for every executive out there,” CEO
Sunny Gupta told Business Insider. “People don’t really know what
the real business impact is.”
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The coronavirus pandemic is
upending business plans and sending executives scrambling to
map out strategies to mitigate the impact of the outbreak as far
out as the next three years.
Companies of all sizes
are laying off employees in droves. Startups are
desperate for new funding. And industry-leading businesses are
seeking to raise billions of dollars in new funding —
significant bailout packages from the federal government.
All C-Suite positions are reckoning with the new normal. But the
job is particularly difficult for chief information officers, who
sweeping digital overhaul plans while ensuring the workforce
Sunny Gupta, CEO of Apptio, has a front-row seat to the action.
The company’s cloud-based platform helps manages over $400 billion
in technology spending worldwide. It was launched in 2007, right
before the start of the Great Recession.
Gupta said launching then was a blessing in disguise because
CIOs at the time were eager to make larger, foundational changes to
IT at a time when others were curbing those investments — all
while still making the necessary cuts to the bottom line.
Apptio, for example,
helped FedEx CIO Rob Carter streamline the company’s
application portfolio and find previously overlooked ways to glean
millions of dollars in savings from ongoing operations.
Now, as the country braces for a near-certain economic downturn
as a result of the outbreak, Gupta said those discussions
are surfacing once again.
“It’s a pretty surreal time for every executive out there,” he
told Business Insider. “People don’t really know what the real
business impact is.”
While parallels can be drawn between the economic downturn in
the 2000s and now, there are some key differences. IT, for example,
was still very much a back-office function back then. A decade
later, CIOs are
spearheading major tech upgrades and are
more central to the business than even before.
Still, the experience Apptio had helping companies through those
turbulent times is certain to come in handy now.
Business Insider spoke with Gupta to learn the four steps that
successful CIOs should take immediately to protect their digital
investments and ensure the organization remains on track despite
the external chaos.
Keep the business running
The pandemic is forcing companies to quickly transition to
an all-remote workforce.
Those changes typically involve extensive planning to make sure
employees are outfitted with the proper equipment, that internal
networks can be effectively assessed by large numbers of
individuals, and that other foundational pieces are operating
Many CIOs, however, were forced to condense all those tasks into
just a few days. And it remains a top priority for tech leaders as
some top officials caution that the outbreak
could last months, not weeks.
“The number one priority [is] upgrading the infrastructure and
making sure their workforces can work from the house,” said Gupta.
“That is quite an additional investment from the majority of our
Plan for potential budget cuts
Apptio’s more than 1,000 clients include 65% of the Fortune
Gupta said CIOs from those firms are being asked to plan for as
much as a 30% cut to the IT budget. For others in hard-hit sectors
like transportation, that number is as high as 60% — a reduction
that would devastate any division and halt most, if not all,
The CIOs “are given 48 hours to come up with scenario planning,”
he said. For most, that is for the rest of the fiscal year. But
some are even upending their three-year strategies to account for
the damage caused by the pandemic.
While some costs like data centers are fixed — meaning there
is little flexibility for CIOs to increase or decrease spending —
others are more fluid. Cloud compute, for example, can be scaled as
needed, Gupta said. And companies can limit their use of
third-party contractors or reevaluate relationships with vendors to
CIOs are also looking at halting more long-term projects that
promising return on investment in favor of initiatives that
will produce short-term value for the bottom-line, according to
Build up trust with the CFO
As companies look to make potentially major decisions about
their investments for the next year and beyond, it is critical that
strong relationships with the chief financial officer.
But a key hurdle in building that trust is the willingness among
tech leaders to be transparent about IT budgets, Gupta said.
CIOs need to be prepared to give information at a granular level
of how much different digital initiatives cost, line items he says
some could be hesitant to promote because of the high-cost of many
of the endeavours.
But in doing so, the “conversation goes from emotion -based to
data-driven and that is the number one thing CIOs can do to build
trust,” Gupta said. “Once that trust is built, it’s magical what
can be accomplished together.”
Play defense and offense
Many enterprises will be forced to scale back spending should
the economic fall-out from the coronavirus be as
severe as some experts are projecting.
But that doesn’t mean the ongoing digital transformations under
way at many companies have to come to a halt. In fact, the crisis
highlighting the importance of those initiatives and helping to
speed up some of those efforts.
Instead, Gupta said CIOs need to seek to halt projects that
aren’t critical to these overhauls and that might have a longer
timeline before they begin producing return on investment.
“These game-changing digital initiatives that will change the
trajectory of the company,” those will continue, Gupta said.
“Companies who have very strong digital-enabled products are going
to be in a much stronger position” in a recession.
CIOs, for example, should continue to seek to eliminate
technology debt and consolidate their portfolio of
applications — a step leaders like FedEx’s Rob Carter did
during the last downturn and one
now technology-forward companies like Honeywell continue to do