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IT directors urged to take advantage of 'rock bottom' prices

Nick Huber
IT directors should start spending rather than cutting their budgets to take advantage of rock-bottom prices from suppliers, analyst firm Butler Group has urged.

Martin Butler, founder and president of Butler Group, argued that IT budgets have become aligned to the “boom and bust” cycle of the economy and that decisions on technology expenditure are not being made rationally.

“The existing  prudishness over IT investments is very fashionable,” he said. “Just as it was cool to boast about the size of one’s ERP budget three years’ ago, today it is even cooler to boast about the deep cuts being made in the IT budget.”

IT directors should break free from the cost-cutting mentality and take advantage of cheap hardware and software on the market, according to Butler.

“The best time to be buying information technology is right now – prices are cheap and because the competition is underinvesting [in IT] there is a real chance of realising competitive advantage, he said.

"When the market starts to pick up the savvy investor will have the necessary systems and infrastructure in place to realise the planned benefits while the competition is still getting itself positioned on the starting blocks.”

The upbeat advice comes amid a raft of recent research indicating that the three-year slump in the IT market has finally ended. IT spending is up across a range of industries, while the jobs market is also showing signs of a recovery.

Some analysts remained sceptical however. They predicted that IT directors would continue to cut budgets for the foreseeable future.

“I believe IT directors are not spending their full budgets and are being encouraged not to spend it by the business,” said Anthony Miller, research manager, at Ovum Holway.


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