Focus on spending smarter than spending less, says HP study

MUMBAI, INDIA: A study conducted by HP revealed that 48 percent of Asia Pacific respondents view the current economic climate as an opportunity to restructure their technology environments for the future.

These organizations understand that by deploying a shrewd technology strategy to improve efficiency and cost-effectiveness now, they can come out of the economic downturn ahead of competitors.

“In every economic cycle, there are winners and there are losers. During an economic downturn, the stakes are higher—some organizations use this time to reduce cost and build competitive advantage,” said Jim Wagstaff, VP and GM—StorageWorks Division, HP APAC and Japan. “HP is focused on delivering technology solutions to our customers that will help them emerge from this downturn stronger and prepared to aggressively capitalize on new opportunities for growth,” he added.

75 percent of respondents in Asia Pacific feel that in today’s economic climate it is more important than ever to have good alignment between technology and the organization’s business goals. Examples of this include applying technology to maintain current revenue streams or to generate new revenue streams, as well as providing improved resources and support to business units.

A technology executive from a company in the Asia Pacific region said, “Now it is the time to improve the efficiency of the IT system itself. In short, we think we have established what is necessary for our business and we now have to look into making our IT system itself more effective.

The right level of spend on the right projects:

For many technology executives, the first step to improving their contribution to the organization’s strategic goals is reducing unnecessary spend while deploying new technologies to gain efficiencies. Respondents point out that the goal is not simply to spend less but instead to spend smarter.

Asia Pacific organizations expect to exit the economic downturn with infrastructures that are cost-effective (40 percent), optimized (27 percent) and efficient (41 percent).

In Asia Pacific, 29 percent of technology executives say the economic climate has made them more likely to consider moving away from mainframes. Across all regions, a main driver for the switch is the high cost associated with mainframe maintenance and licensing. Many respondents are shifting away from mainframes because alternatives allow for increased flexibility as well as saving money, time and space.

Most technology executives are planning a combination of projects that will consolidate IT operations, reduce redundancy and improve service delivery and flexibility, while making IT more cost-efficient. Executives from across the region indicate that they are either planning or considering the following projects in the next 12 months:

- Server and storage consolidation (62 percent)

- Virtualization (58 percent)

- Application modernization or consolidation (49 percent)

- Automation (42 percent)

Organizations indicate they plan to pay for these using a combination of strategies, primarily cash on hand (62 percent) followed by financing (23 percent).

One North America respondent explained, “I expect to be able to provide a comparable level of services at a reduced cost. That’s the nuts and bolts of it. This should allow us to do things more efficiently. By doing things more efficiently, I’ll maybe be able to do more things, provide a comparable level of service, and yet reduce costs at the same time.”

Flexible sourcing and spending keeps technology current:

Given the current economic environment, 52 percent of respondents in Asia Pacific see outsourcing as an attractive solution. For most respondents, the decision to outsource is influenced by how cost-effective it will be, the quality of service and solutions, the increased flexibility, the manageability and efficiency it offers, or by specific project requirements with a need for specialized skills.