SLOWER ECONOMY—SMALLER IT BUDGETS Since the beginning of the new millennium, and despite the impressive growth we have discussed so far, world economic growth and spending have slowed significantly. For the foreseeable future, the majority of CIOs are not getting any increases in their budgets, which means they have to make the most of what they already have and be cautious about further spending. Any request to the Board to sign off new projects will come under close scrutiny for essential value to the business. In the wake of the slowing economy, a "bare bones budget" approach to technology spending has taken over and created new buying patterns, with the focus on selecting the most affordable option that can deliver the quickest return on investment. This is taking the form of smaller, highly measurable projects and, increasingly, an interest in automating many IT functions, in an effort to reduce staff, boost efficiency, and save money. IT technology must keep a business up and running while also giving the corporation the competitive edge. This is the process most sought after by senior management. This is where autonomic computing can have significant impact of the future IT budgets. Certain key steps can be taken to maximize IT budgets to the fullest. To ensure this, the budget-conscious CIO should: -
Maximize the existing software and hardware. Hardware costs traditionally form the largest part of precious IT budgets, and typically, individual servers are poorly used. A recent survey of large companies by Morgan Stanley found that 67 percent of servers are utilized at less than 60 percent of capacity—this is a shocking waste of IT dollars and can be a source of future income. Grid computing, for example, is just one way to allocate that wasted money and, in turn, create a greater workload output. -
Reduce the complexity and consolidate. By reducing complexity throughout the IT infrastructure, consolidating everything from files to databases to servers and data centers, enormous savings can be achieved. In addition, most companies struggle with a disconnected mix of mainframe, client/server, and Web applications, and this complexity is further compounded by any merger and acquisition activity, which can occur at any time—usually at an unexpected time, from an IT perspective. -
Spend wisely. Today, businesses of all sizes should concentrate on investing their IT budgets in technology that maximizes their existing infrastructure. This allows them to focus on their core business, while taking a longer-term strategic view to ensure that they have the necessary technology in place to emerge from the current economic downturn ahead of the competition. Those who spend wisely today will be well placed to be the winners tomorrow. -
Evaluate potential new automated technologies. CIOs would be wise to keep a business eye on new technologies that offer greater self-management and increased automation. As all IT human capital costs soar, there will be a direction from senior management to reduce staff or focus existing staff on creating more business value. It is inevitable. The most crucial step in this process of assessing the value of an IT infrastructure to the overall business is to understand the business requirements and to map technology investment to them. |
