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How To Turn an IT Disruption to Your Advantage
Service outages can be a good thing, if they’re the catalyst for building resilient systems.
5 Min Read
Pavel Muravev via Alamy Stock
When it comes to service outages, data breaches or systems failures, there is typically only one thing IT leaders can say with total confidence: This won't be the last time.
No matter how effective your tech and security investments are, risks cannot be entirely precluded. And if a crisis does occur, it can not only demonstrate your effective planning -- but it can also be turned to your advantage.
For example, let’s turn to an area that few people would associate with an appetite for risky behavior. Economics is famous for advancing “one crisis at a time” and CIOs could benefit by taking a leaf out of its (many) books. Like firefighters battling a fire, the immediate job for CIOs is to put out the flames. Once the situation is under control, teams need to forensically identify what sparked it off in the first place, so that they can help prevent future issues.
Events such as a major outage are a signal for CIOs to consider:
Using the crisis as a catalyst to make the case for funding for cost avoidance, risk mitigation and foundation investments;
Focusing on who are your partners and who are your vendors;
Analyzing your non-financial response measures
A Crisis as Catalyst
One of the toughest things for CIOs is to get funding for issues that haven’t yet occurred. Who among us likes paying for problems that haven’t yet happened? Cost avoidance can seem hypothetical versus solving problems that are clear and present dangers.
The costs for those immediate challenges are usually more obvious. And mitigating the issues before they occur may be much more cost-effective and these risks may be much more than financial.
CIOs can not only learn from the experience of others, but they can use it to show how their tech investments are securing their business and saving them financial and reputational damage.
Partners or Vendors?
There is a major shift to outcome-based contracts in the tech industry, largely driven by developments such as generative AI. The latter is now realizing its potential to boost productivity, which is altering traditional value propositions.
Traditionally, vendors were paid based on the volume of work or hours done. However, the new model emphasizes compensation based on the achievement of specific outcomes, such as cost reductions or revenue improvements. This approach not only aligns the vendor's incentives with the client's goals, but it also means that vendors take on a greater share of risk.
The subtle shift here is away from the typical buyer-vendor relationship toward a technology partnership. Of course, this can be a powerful thing: Both organizations become deeply invested in the project's success, sharing in both the risks and rewards.
However, it won’t eliminate all risk. Both the client and vendor need to think clearly about how their collaboration will work beyond just the technical capabilities. Both organizations will need to consider if their corporate cultures are aligned, along with their shared vision for the project. Tech leaders need to consider if their potential partners are not only capable of driving innovation but are also culturally attuned to foster a collaborative and sustainable relationship. They may likely be sharing headlines together -- in good times or bad. So how will that feel, and to what degree will it impact each company’s brand, identity and customer trust?
It is imperative for companies to establish clear risk-mitigation strategies. And they will need to have agreed, robust frameworks that ensure continuity and reliability, even when unexpected disruptions occur.
A Focus on the Non-Financials
When it comes to contracts, tech leaders focus on mitigating risk and discussions tend to revolve around “who pays if X goes wrong.” There is one aspect, though, that they need to feel total ownership over: their company’s public reputation.
Companies need to have thorough restorative plans for when something does go wrong -- including how they mitigate customer and public impact and perception. In the wake of a crisis, CIOs need to consider how they respond immediately so that customers and clients feel supported.
To effectively prepare for inevitable incidents, companies need a rapid reaction plan. This plan should prioritize customer support, ensuring that clients feel adequately supported during disruptions.
What’s on the CIO’s Mind
There is an evolution taking place in the role of the CIO. As the role of technology has expanded in business, it has created an isomorphic effect in the IT function. The CIO’s role has also grown in importance and scope: They need to consider how to grow from being an effective cost manager to being a growth driver. Similarly, that shift toward outcomes-based contracts means that tech leaders are now being judged on costs but also on non-financial outcomes.
In my experience, ambitious tech leaders typically operate in two mindsets.
Like most C-suite leaders, to some extent they are considering their next step or role, perhaps with a bigger organization. That may be beyond the CIO function or they may be considering evolving that function to a new form altogether.
The second mindset is more concerned with legacy: As a C-suite leader, they don’t just want to keep the lights on, they want to make an impact that their name will be tied to. This will be a major move, driven by technology and perhaps requiring an acquisition, a significant investment, a people transformation program, or all of the above.
Whether you are trying to reach the next level or create a legacy, having the right risk-mitigation strategy, partners, and both financial and non-financial response is a key building block. A little trouble might just be what you need to reach your goals.
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