During good times, when business is booming, organizations are in a frenzy to ensure that nothing gets in the way of their growth. They expect the IT infrastructure to deliver whatever it takes to support the business on its upward movement.
So generous investments are made in IT to ensure that it can scale up to support the business, and IT budgets continue increasing. CIOs are busy implementing new projects, evaluating new technologies, and negotiating new deals. They seldom have time to worry about the growing IT infrastructure complexity, causing inefficiencies to continue creeping into the system, and bloating the IT budgets. And then the tides turn and markets see a slump, making panic and disorder order of the day. Talks of manpower retrenchment and IT budget cuts become more prominent than anything else.
For those new to this phenomenon, it sounds like the end of the world, but it really isn't. Market downturns and upswings are a part of the economic cycle and continue happening. We just have to know how to deal with them. The good news is that with everyeconomic downturn, we have newer and better technologies available to deal with it. So, this time's no different. In fact, organizations today have access to far more technologies than ever before to combat the slowdown, and in this story, we'll look at some of them. Plus, we also interacted with CIOs of leading Indian enterprises to understand what they're doing to combat the slowdown.
First identify the budget sappers
Before you can start identifying technologies to combat the slowdown, it's important to identify the budget sappers. You have to analyze which areas consume most of your IT budget. Broadly speaking, in today's scenario, these can be divided into the following five areas:
OpEx and CapEx: OpEx is perhaps one of the biggest budget sappers. OpEx or Operational Expenses are costs incurred to manage the IT infrastructure. In many cases, these can consume 50 percent or more of the IT budget. They comprise of manpower cost, recurring software license fees, and service charges to various service providers like ISPs, telecom, or managed services providers. Then of course, there are the regular maintenance costs and other costs like printing, paper, etc. OpEx costs are the most difficult to cut down because they're more difficult to predict. If your service provider suddenly increases his monthly fee, then it has a significant impact on your OpEx.
The other major chunk of an IT budget are the Capital Expenses. These are the costs for implementing new IT projects or for purchasing new hardware, software, and services. During an economic slowdown, it's very easy to reduce the CapEx because their costs are fairly well known. The difficulty lies in reducing your OpEx because it's divided into so many elements.
Infrastructure Complexity: We just talked about this in our intro, and yes it's another big budget sapper. As you continue deploying new hardware and software for new projects, the complexity of your IT infrastructure increases. Lots of servers, multiple operating systems and databases, runaway storage capacities, are just a few things that have to be managed. These obviously affect productivity and increase chances of downtime. So you need solutions to simplify the infrastructure, possibly by reducing the number of servers, databases, and Operating Systems and optimizing storage usage.
Power: This may not sound like much, because it's usually not the CIO's responsibility. However, if you start doing the numbers, you'll realize that IT consumes a significant part of your organization's electricity. And sadly enough, there are plenty of places where IT's wasting a lot of power. So you need technologies to control this wastage. Thankfully, there are plenty of them, which can lead to considerable savings.
Travel: This doesn't just apply to the IT team, but to the entire organization. Every company incurs significant travel expenses. Given today's congested roads and delayed flights, traveling is becoming increasingly difficult. So there are obviously technologies available to reduce travel.
Manual processes: Despite having so much of IT, there would still be processes that need to be done manually. Even today, having an self-managing, self-healing IT infrastructure is still a a distant dream. There are still so many tasks that an IT manager has to perform manually. The same goes for the rest of the organization as well, so technologies are required to automate as many manual processes as possible.
