IT budget constraints force project focus, vendor deals

Smaller storage budgets mean users have to re-evaluate projects, while suppliers should offer customers staggered payments and other deal sweeteners.

The current economic crisis appears to be getting worse, with seemingly no end to the pessimistic articles or doom-laden statistics in the press. Organisations are therefore going into survival mode -- slashing budgets, cancelling projects and laying off large portions of their workforce. While most board members understand the importance of information technology, struggling IT departments are being asked or told to do more with less . But this doesn't have to mean an all-out ban on projects; rather, it means that the entire IT team needs to look further than normal to make the numbers add up in their favour.

Organisations invested heavily in IT during the boom years of 2003 and 2006. This means that much of the hardware and software purchased during that time will soon be entering a refresh period. These projects will need to be scrutinised to ascertain whether they provide real value, and what the cost of their upkeep will be during the next maintenance cycle. If they're found to be underperforming, the funds allocated to them can instead be used to top up the budgets of those core projects projects necessary to keep the business afloat or to provide a competitive advantage.

Intelligent sales forces should look at their previous tender wins and losses to ascertain when customers will once again purchase software and hardware. Although user budgets may be smaller, suppliers should offer staggered payments and/or other "deal sweeteners" to improve the payment terms of their customers. It's much better for a manufacturer to have their hardware and software stockpiles reduced, even at smaller margins, than their customers'. Such flexibility will help build relationships between suppliers and users, and can lead to favours being repaid during better economic times.

It's amazing (and refreshing) to see what lengths some organizations will go to in order to win new business or retain existing clients. For example, I'm currently renovating my house and it's remarkable how attentive salespeople are when they realise that you actually have money to spend. It usually only takes the mention of a competitor's product, or obtaining other quotes, to get another couple of points discount on commodity items. Even if you don't achieve further savings, you're no worse off than you would have been. At the end of the day, if you don't ask, you don't get.

During times of economic feast, organisations can get flabby and wasteful, becoming ill-prepared for the lean times that are currently upon us. It's time for the survival of the fittest, and only those organisations that can adapt will be around to flourish when the upturn begins.

About the author: Steve Pinder is a principal consultant at GlassHouse Technologies (U.K.) Ltd. Pinder has more than 11 years of experience in backup and storage technologies, and has been involved in many deployments for companies of varying size, with responsibilities ranging throughout the sales and deployment lifecycle. He has a BSc Hons in Computer and Communication Systems.

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