Nashville Tech Story (3/5/10)
Efficiency, Virtualization, and Cloud Computing were common themes at last night’s roundtable event, titled “The Impact of the Recession on IT Operations and Management.” The event was hosted by Bass, Berry, & Sims (www.bassberry.com) and took place in their conference center in the new Pinnacle Building. Scott Thomas and Bob Brewer, both practicing attorneys at Bass, Berry & Sims, moderated the discussion. Panel members included three enterprise CIO’s: Andy Flatt, Healthspring; Scott Blanchette, Healthways; and Rick Proctor, Thomas Nelson.
Scott Thomas kicked off the session by taking us through a number of graphs, which illustrated the effect of the economic downturn over several industries, health care and information technology in particular. In addition, he showed us the average IT Budget by percentage in revenue and a graph which showed the .com meltdown in comparison to last year’s downturn, which was had a much bigger impact.
The first panel question took us through how the recession affected the acquisition and use of software, hardware and telecom. Proctor mentioned stretching out the lifespan of non-mission critical application deployment, while Flatt and Blanchette implied that the health care industry has not reduced spending, but has not increased it either.
Proctor was then asked, “Do you think the economic downturn is driving or hampering the transition of digital book sales?” Proctor mentioned that the digital business is growing, but it’s not big. Instead of driving digital, it is more about improving the efficiency of delivery by more on-demand printing and shorter runs. In addition, Proctor mentioned Thomas Nelson, while they are providing digital for the Kindle, Sony Reader, and Apple’s iPad, their focus is more about content delivery — the mechanism in which they provide the content is not really what’s important, it’s more about getting the content in front of the readers.
When Flatt was asked if HealthSpring has to be more efficient because of the downturn, he mentioned his company is investing in technology because it is what makes business more efficient, especially in the virtualization space. Proctor mentioned Thomas Nelson has been investing in the virtualization space for about three years, focusing on outsourcing things that are not their core competency.
Later the group as asked if Senior Management views IT as a cost or an investment, and what participation do they ask from CIOs in their strategic spending? Proctor alluded that IT budgets have been flat over the past few years, but as expenses have decreased, the level of investments have increased. Blanchette mentioned their focus is to take new and innovative technologies, and apply them in new ways that in turn reduce costs — the CEO asks how can Healthways wrap technology around problems and find a solution to reduce expenses. Flatt encouraged the group that IT needs to stop segregating itself, and to get out of the business of bridge building and back to building the foundation.
In regards to talent acquisition, the three panelists agreed they have been hoarding their staff over the past couple of years because employees have been staying put. This year, their worry is that people are going to be looking places they would not have thought of looking during the downturn, and some companies even have a significant budget allocated to staff retention. In preparation for the recovery, there has not been much change except for the staffing aspect.
When asked about purchasing new technologies, cloud computing resounded across all three panelists. Flatt mentioned three things, which all add to efficiency, virtualization, record retention, and real estate.
In closing, the group discussed vendor relationships. Advice to vendors from the panelists:
- Understand more about the challenges each company is facing and focus on recommending solutions
- Focus on reducing revenue or marginal improvements for businesses
- Come forward with your changes, and make recommendations on how your changes can improve business
Special thanks to Bass, Berry & Sims for hosting the event.
