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Recession Pares IT Budgets, but CIOs Keep Projects on Track

Recession Pares IT Budgets, but CIOs Keep Projects on Track

Murali also has brought in consulting firm Gartner to analyze a proposed ERP rollout and recommend strategies for reducing its potential cost. Two years ago, the school probably would have just chosen one of the major ERP vendors, signed a contract and launched the project, she said. "Now," she added, "we're analyzing every task, every process."

In addition, the IT department has hired a "director of fundraising" to reach out to tech-savvy alumni and has taken Microsoft up on an offer to host the school's student e-mail system on its servers. "we're pursuing all kinds of unusual options, things we wouldn't have considered before," Murali said.

Marie Mouchet, CIO for electric utility Southern Co.'s power generation unit, said the company has lowered its overall IT spending by about 10 percent because of the economic downturn. And IT executives are "kind of in a real-time monitoring mode" on spending, Mouchet said, adding that the company has cut merit raises and bonuses, left vacancies unfilled and pushed back some projects.

But the generation unit hasn't reduced its IT headcount, and most major projects remain on track, Mouchet said. That includes the rollout of a new billing system for wholesale contracts as well as the companywide deployment of Oracle Corp.'s financial applications and asset management owned by IBM - a project that will cost in the hundreds of millions of dollars.

Getting more money for projects isn't a likely option, though - especially after Southern Co. announced a set of cost-reduction efforts in December. Later this month, IT executives are scheduled to meet with the chief financial officers of the utility's operating companies for a regular quarterly review of projects costing between US$1 million and $20 million, and the focus "is all going to be about cost," Mouchet said.

While projects are continuing, she added, "you don't have the opportunity to go back in and say you need more money. [The recession] puts more requirements on you meet your schedules and your budgets."

Mouchet said the need to rein in spending also may accelerate Southern Co.'s adoption of new technologies, such as YouTube for video-based training and Amazon.com's Kindle e-book reader for putting repair manuals into electronic form. The company was looking at those tools before the recession hit, but the downturn "may be a catalyst to get a lot of these things in quicker," she said.


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