One size fits all?

Questioning the relevance of downsizing is as important to IS executives as it is to the organisation's CEO.

Although many organisations have downsized part or all of their operations, the question still pertinent is whether downsizing is the panacea or does it merely introduce new complexities?

The answer in most cases will be dependent upon the motives for undertaking the exercise. In some cases the action was wrong in the first place, downsizing was not the response appropriate for the problem or opportunity at hand.

Downsizing, of course, does not have to go hand-in-hand with outsourcing, but in many organisations the terms are often used interchangeably.

For IS executives, however, downsizing does not necessarily just mean a smaller organisation with some non-core functions now being performed by another, complementary organisation. For the IS department, downsizing may simply mean the transfer of IT functions from previous generation systems to new, smaller systems in a distributed environment.

Recent IDC research in Australia suggests a relative decline in the prominence of the mainframe in many local IS operations.

The research suggests that almost half of the CIO respondents indicated they have moved core business systems from their mainframe.

During the past two years, IS downsizing has moved from the "thinking about" or planning stage to the implementation stage.

About two-thirds of respondents to the 1998 survey are now actually moving some mission-critical applications from their mainframe.

They are proceeding with the downsizing of their IT infrastructure, even if they are not actually outsourcing the operation.

These CIOs are now confident that the transfer will meet their goals and be cost-efficient, whereas two years ago there was still a marked hesitation, they were not confident to proceed.

The change is indicative of the role IS can play as organisations seek a clear path to the future.

In some cases, a redeployment of IS tasks and resources can be an effective response to organisation needs.

In other cases, a restructuring of the IS department will be a critical issue, the smaller size and changing responsibility will be the key to a radical change in the nature of the organisation and the way it conducts its operations.

Smarter use of IS resources may, in fact, pave the way to contribute to the solution to other strategic issues facing the organisation, rather than the reduction in IS resources being the solution.

* Graham Penn is general manager of research for IDC Australia

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