Spending surviving the credit crunch, says research

Lock sees hope as organisations target greater efficiencies

You do not need me to tell you that times are hard. The economic climate, while nowhere near as gloomy as banks and economists appear to believe, is tough.

Businesses are being very careful with their money. Research we did during the really dark days of last November suggests that while IT professionals are not overly alarmed, four out of five believe IT investments are affected.

Most organisations globally are experiencing similar impacts to their IT budgets or expecting the economic climate to exert some effect in coming months.

The once-mighty financial services sector has been hit severely, with the travel business not far behind.

Yet, despite confidence being low, it is clear that, unlike during previous recessions, IT looks relatively well prepared.

For example, if in 2001 a business manager was questioned on his department’s dependence on IT systems an answer of ‘very’ would likely have been delivered after considerable thought.

Today all levels of management understand just how difficult ­ if not impossible ­ everyday business life becomes when IT systems are not operating effectively.

To a degree this intimate dependence of routine business functions on IT service delivery should help ensure that IT does not bear a disproportionate burden when it comes to any budget adjustments.

Vendor assistance
In most IT departments it is tricky to get access to capital for even the most
obviously valuable of projects. The lack of availability of capital in current financial markets may throw some attention onto alternate sources of IT financing.

However, while the credit crunch shows few signs of softening soon, the financing arms of larger IT vendors are generally in much better shape. Recent conversations with IBM, HP and Microsoft among others, confirms they are well positioned to assist creditworthy customers in various ways.

It is worth investigating players such as these, and possibly newer players such as Smartfundit.com, to explore what financing options they might offer your customers.

These vendors and sources of dedicated IT financing can provide traditional, although still under-appreciated, offerings such as leasing but can also offer full-blown project financing potentially covering all hardware, systems software, applications and services.

It is certainly not the case that all projects are now on hold. In many firms there are still projects proceeding that create economic and business value.

Investing to save
Many actions likely to ease the pressure may require some investment. Whether it is virtualisation solutions and management to enhance efficiency, desktop refresh
initiatives to reduce costs and the burden of support, or advanced communications to drive workforce level efficiency, a few well-qualified tactical investments now will deliver business benefits.

The challenge for all potential IT projects will, for the foreseeable future, stretch beyond making a sound business case to encompass securing the capital needed to fund the investment. This is an area that suppliers in the IT channel should take immediate steps to address.

Tony Lock is programme director at Freeform Dynamics