Gartner's Compliance & Risk Management Research Community met recently and considered what IT managers should do given the economic turmoil spreading around the world.

What started as a problem with risky mortgages in hot real estate markets in the United States has spread to Wall Street with a devastating impact on the financial health and well being of a number of banks and an insurance company. Each day, the turmoil spreads, first to the equity and commodity markets where investors and speculators attempt to preserve what capital remains. Next, the central banks and governments rush in with an infusion of liquidity in an attempt to keep the money flowing through the world's financial market.

The media commentary on the current financial crisis sounds the tone that all the laws of economics and free markets no longer apply. The reporters sound as if the next developments will be Mother Nature suspending the laws of physics and gravity. Against this backdrop, CIOs and IT managers wonder, "What do we do?"

There is no denying that business as usual is not currently happening. To speculate or attempt to deal with the regulatory fallout that will follow this financial crisis is currently a waste of time. The central focus that CIOs must address now is what impact will this financial crisis have on IT in the next budget cycle. Also, how can IT help the enterprise demonstrate trustworthiness to key stakeholders, maintain critical functions that drive revenue and cash flow, and focus on the needs of the people who work for your organization.

At the heart of the current financial crisis is a lack in confidence in the credit markets. Government officials report that interbank lending has ground to a halt, which prompted the U.S. Federal Reserve to step in on 7 October 2008 and offer direct short term lending to U.S. corporations.

First, to combat this lack of confidence permeating the market, enterprises should take extraordinary means to increase their financial transparency and demonstrate that they have the ability to meet their obligations to creditors, customers, and the communities where they are located. Senior management must develop and exercise a voice in the public policy dialog immediately - and voluntarily. Do not wait for Congressional subpoenas, shareholder meetings, or ambush interviews by the media. Tell the world, honestly, about the state of your company and its plans for the near term and the long view.

Second, everyone must develop a laser-like focus on the organization's value proposition, those intangible reasons that define why your enterprise exists. To leverage an old cliché, every oar must be in the water and pulling in the same direction. The goal is not just to make it to the finish line, but to survive. Ancillary or tertiary projects must be postponed for a later time; and tasks that improve customer service, remove friction from processes, and increase cash flow should be top priorities.

Finally, think about the people who work for you. No doubt they are scared by the uncertainty about the future. Management must be honest and open in keeping the rank and file apprised of the organization's situation. They should be encouraged to communicate that information in a timely fashion with friends and neighbors in the community. Management should be extremely sensitive to non-work related issues that may have an impact on employee morale and well being. The most obvious is related to housing, mortgage default and potential foreclosure. However, it can extend beyond the most obvious issues. The problem with short-term lending is also having an impact on some governmental agencies, and some school districts are cutting back to only four days of instruction, forcing many parents to scramble and find new daycare arrangements.