The current economic environment has caused many IT departments to tighten their belts. But have they taken it too far? Do they risk not being able to meet the present and future needs of the business for the sake of cutting the bottom line or even put the company at risk?
A recent survey commissioned by Microsoft and done by Harris Interactive reveals that American IT departments plan to spend only 29 percent of their budget on innovation in 2009. This compares to 41 percent in Japan and the U.K.
In the report 55 percent say the economy has changed the role of IT and 51 percent say that budget constraints are the biggest barrier to their innovation. Clearly the recession is hitting many IT departments hard.
Driving Business Efficiency
Most of those surveyed reported that they are focused on driving business efficiency rather than on simply reducing IT costs. About two-thirds plan to increase their planned investments in at least one infrastructure technology.
IT is looking to invest in areas such as virtualization (42 percent), security (36%), systems management (24%) and cloud computing (16%). All of these investments will help IT better streamline operations and delivery more business value. But is this enough?
Security is Still Number One
Security still seems to be the number one issue in managing infrastructure. Protection of customer and company data heads the list of security priorities with 73 percent saying they plan to make security investments in the next one to three years. Considering the risk to the business, this is a wise investment in any economic climate.
Considering a recent report from Symantec showed that 88 percent of the 1,000 enterprise security experts they surveyed reported cyber attacks with nearly all of them experiencing some form of loss it is clear why security is still at the top of the list.
Symantec also reports that in 2008 they created more than 1.6 million new malicious code signatures. That is a 165 percent increase over 2007. Yes it is a dangerous world out there so investments in security have become a strategic necessity.
When Does the Squeeze Hurt Too Much?
Given the ever increasing demands on IT from the business now and in the future, is it wise to cut so deeply that companies risk loosing their competitive edge? Granted there are some companies that have no choice but to cut. However I think many are doing so as a defensive measure with the uncertainty of the economy.
To remain competitive and meet the growing needs of the business IT must continue to innovate and invest. By making smart and targeted investments in IT companies can maintain their competitive edge, secure their infrastructure against damaging losses and eventually improve their bottom line with increased efficiency and productivity.
To simply sit on the sidelines totally focused on cutting IT costs while your competitors position themselves with new capabilities and technologies companies are putting themselves at risk of further pain once the economy does turn around.
One does not have to make wholesale changes or massive investments to improve. Using targeted investments in IT along with a Kaizen approach of slow, but continuous change IT can help position their company to remain competitive in the present economic environment as well as give the company a firm foundation on which to build growth in the future.