META warns of draconian IT spending cuts
META warns of draconian IT spending cuts
Analysts Meta Group have issued a warning to companies looking to trim their IT budgets that any such cuts must be targeted and not just initiated across the board, saying that such a "draconian" measure can cause significant risk and loss potential in business agility.
Meta advises that companies must treat information technology spending as they do business technology spending (e.g., investment portfolio) and categorise investments (e.g., core, non-discretionary enhancements, discretionary enhancements, investment, and venture spending, or a similar categorisation scheme). Only then, says Meta, can the business rationalise the right investment choice/mix (and commensurate spending cuts).
"People have forgotten core operational and non-discretionary expenses must be paid for, like the infrastructure maintenance bill that includes servers, storage, middleware, database, and network components," says META Group analyst Doug Lynn. "If an organisation doesn't pay to maintain those assets, when they do break, the vendor many not have the experience or skill (or enough of it) to help out. What does an organisation do then?" If maintenance is not kept up, the risk of significant outage as consumption organically grows cannot be left unknown and unaddressed - it is career-altering should something happen to mission-critical systems. Furthermore, the groundwork for an adaptive infrastructure and operational processes will be severely jeopardised. CIOs will find themselves in the position of pressing on the gas pedal and watching their car stand still.
"Companies have gotten into a highly compromised position - dictating to IT management that it first accomplish more results with the same, and eventually less funds," Lynn adds. "Regretfully, it will take a significant experience (e.g., failure of mission critical systems, failure to make compliance deadlines) for management to realise that non-discretionary spending is not optional or something to cut corners on."
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