December 9, 2011: Gartner, an Information Technology research company has projected that the organizations around the world will spend $2,700 billion in the year 2012 on IT products and services. There is an increase of 3.9 per cent when compared with the spending figures for the current year.
According to Gartner, Information Technology is no longer a passive observer in the present world. Now Information Technology plays a leading role in the shaping of politics and economy across the world. It has become the leading driver of growth in business. He added that about 350 organizations will individually invest USD 1 billion in Information Technology as IT has a profound impact on their business performance.
In the uncertain economic conditions, managers are being asked to do more with less. Most of the companies are carefully evaluating the current spending and are trying to reduce the spending, at the same time not compromising on their plans to innovate and grow.
A recent study conducted by Cognizant and Warwick Business School points out that outsourcing is still the major contributor of expenses in the IT department, but most of the organizations do not take the initiative to measure the financial impact of the innovation as a result of outsourcing. Without even measuring the financial impact, most of the CEO’s still believe IT will create a greater contribution to the industry in the succeeding years than the previous decade.
The IT departments of all the organizations should ask themselves whether they need too many employees who service and support hardware and software that are not of strategic importance to the company. Core business functions should be given attention rather than non core business functions. Outsourcing IT functions will help in reducing investment in hardware, which moves the spending from capital; expenditure to operating expenses.
Data centers have become a point of attention for organizations that operate their own server intensive infrastructure and for cloud based service providers. Data centers are now considered as a source for cost saving.
Some of the experts are of the view that organizations should carefully understand their requirements before deciding on how and where to spend the budget, as the technology is changing frequently and swiftly.
During the period of quick technology change organizations should look at the expected time span of the solution and the level of integration required. In the present IT environment, most of the technologies are evolutionary and so decisions are made on the basis of minor improvements with huge reduction in cost.