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How to Prioritise IT Spending During a Recession

How to Prioritise IT Spending During a Recession

Tips for IT cost-cutting--both big and small--including outsourcing, staffing, consolidation of data centers and storage and server virtualization.

As Caesar Augustus chastised generals who rushed into battle: Festina lente! (Make haste slowly!). In these confounding days, with banks collapsing around us, global markets spinning into oblivion, and the shadow of greed darkening the promise of capitalism, this admonition is good advice for us now. Translated into the realm of enterprise IT management, Caesar is telling us to hold up on projects, IT spending and staffing decisions, determine how far ahead we can see, avoid knee-jerk reactions, and take stock of what we have. Acting too quickly without sufficient rationale may expend precious resources in the wrong direction, inhibiting our ability to react when needed.

Even though some organizations will feel greater impact from the tightening economy than others will, this is a good time for all to assess IT spending choices. By continuing to invest wisely during a downturn, an organization strengthens its long-term future. Thanks to virtualization technology and outsourcing, there are some obvious "easy wins" in the data center. Collaboration technologies make it easier to be productive without being co-located. Deep within the IT infrastructure, cost can be contained by reducing the number of moving parts and redundancies. In addition, as people and partners move into, out of, and within an organization with greater frequency, well-designed identity management and other security controls for the virtual enterprise add considerable value.

Careful stewardship over existing assets and frugality concerning new investments is good policy--in both weak and strong economic times. Reduced spending doesn't mean that IT has to stand still, but it will force a necessary examination of priorities.

Consolidate

Consolidating across and within data centers is at the top of the list for cost savings. Reducing the number of machines, and even the number of data centers, provides clear, quick bottom-line benefits. Consolidation initiatives usually begin with server virtualization and are now extending to storage virtualization. Burton Group believes that a new wave of client virtualization will soon follow, with greater flexibility, manageability, and cost savings than client virtualization scenarios of the past.

Outside the data center, consolidation can also be achieved by:

  • Reducing the number of vendors and suppliers, especially of overlapping technology and services.
  • Reducing the number of applications installed on users' machines, especially if those applications are not core to the user's job function. This will reduce licensing costs.
  • Examining and, where possible, renegotiating new enterprise agreements with major vendors to ensure that unnecessary fat is trimmed.
  • Reducing the number of redundant data sources (also related to data management).
  • Performing data de-duplication.
  • Reducing the amount of business process redundancy.

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