Making IT budgets this year will be more daunting than ever for the C brigade. With recession in full steam a CIO’s job has become more challenging than ever as they have to prove the worth of every buck they plan to spend. They know they are going to be called upon to do much, much more with potentially much, much less.
The top 5 areas to spend:
- Green IT
- Operations management
- Business continuity
Where is the money going?
As enterprises face a challenging economic environment, IT spending budgets will essentially be flat with a planned increase of 0.16 percent in 2009, according to results from the 2009 CIO survey by Gartner Executive Programs (EXP).
A vast majority of technology decision makers are currently implementing or planning to implement consolidation, business continuity and virtualisation projects. All these projects have the potential to also achieve business goals. By taking a comprehensive approach and aligning these autonomous projects to an overall transformation strategy, an opportunity exists for CIOs to maximise the value of their transformation initiatives. Since transformation is a perennial priority, no matter what the economic condition, initiatives like automating business processes, sustainability, to gain cost efficiencies will catch CIOs’ attention in the year ahead too.
The five point approach A list of the five most actionable points that CIOs can follow this year.
- Cut costs: With IT increasingly under the microscope, cost cutting is a priority for many CIOs. Many report that the percentage of their total IT budget allocated to new projects will decrease and that they have already begun freezing or cancelling IT capital spending. Companies are likely to “sweat their assets” for longer and when they buy new IT, are likely to be looking for very good deals. Large businesses are conducting in-depth, value-for-money checks on all their current IT investments, on staff and on suppliers and over 2009, they will be watching every penny spent and searching every corner to save costs. All outsourcing activities will therefore be in line with these requirements only.
- Protect value: CIOs are looking to application infrastructure and services expenditures to help drive down costs. Plenty of cost-saving technologies exist in the marketplace, and savvy IT leaders will be well-served by maximising their use this year. Despite the economic pressures, businesses are more focused on growing revenue than cutting costs. But to do the latter, they are doing something surprising: They’re increasing IT spending to help drive down costs.
- Build Capabilities: While CIOs are using this time to build capabilities around service integration and sourcing strategies, their energies should be channelled towards driving operational efficiencies. Green IT and Process Automation are the two most common, yet it is important that CIOs take a fresh look at it. Green IT, for instance, has moved beyond being a fashion statement and is being used to drive cost down aggressively. Server virtualisation and date centre consolidation continue to be the topmost priorities, as they provide upfront cost savings and also contribute to the green charter of the organisation. However, CIOs can also look at other measures like MTaaS ™ or Managed Tools as a Service, to manage their IT operations, making them more lean and flexible.
- Leverage Services: A robust services model should be an enabler for CIOs to see through these tough times. Having a partner ecosystem that not only helps mitigate risks but also reduces the upfront investment is an ideal situation. CIOs will have to look at aggregation of services at lowest cost points rather than buying services from OEMs and large vendors at higher price points.
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