MORE FOR LESS IS THE NEW MANTRA
IT service companies like IT Focus and Datapac have said that there is still a healthy appetite for technology, but their customers are focused on solutions that will help them do more with less. Cost savings are high on the agenda, but they’re not the only story, according to Edel Creely, managing director of IT Focus.
“It’s also about business benefits and competitive advantage,” she said. “Organisations understand more about how they can work smarter and more efficiently. A year ago, a company’s management would have been sceptical about mobile computing, for example. Now they can’t live without it because they can see the benefits of anywhere, any time access.”
The relentless advance of technology is recognised by organisations large and small, as something they can ill-afford to opt out of, regardless of the economic climate.
Morgan Murphy, business development manager at Datapac, said it was now a familiar mindset. “Even though companies are looking to dramatically cut costs, they still want to increase business efficiency and use technology to help them do it,” he said. “In the past, the business environment was so fluid and vibrant they didn’t have time to look at controlling costs. Now they do and they are using to technology to plan for the future.”
He summed up the new world of IT management. “As a vendor, we have to make a business case for solutions and demonstrate productivity increases. At the same time, customers have to do more with less. They want to build for the future and get the maximum efficiencies with the workforce that they have.”
The upshot has been that organisations have adopted a more holistic approach, according to Murphy. “It’s no longer about having point solutions to fix certain problems. Everything has to be part of an overall strategy and there has to be a definitive return on investment. If there isn’t business value to be derived from a project, then it isn’t going to happen.”
Favourite flavours
Some technologies have found themselves more in favour than others. Virtualisation, information management software like Microsoft SharePoint and managed services are all seen as ways to increase efficiencies and save money.
Murphy said energy costs in the computer room could be cut by 80 per cent with virtualisation. Sometimes there were soft savings that were less tangible, as Creely explained. “It’s straightforward to show cost reduction in power by consolidating server infrastructure, but savings around better manageability and being more agile are harder to quantify.
Being able to quickly add further capacity or install new applications are things you can do with virtualisation that have a value.”
She said that virtualization was still a huge opportunity because most organisations had only gone down the road with server consolidation.
They had just started to think about the desktop and storage. “There are tangible savings to be had. Sometimes it’s about taking our repetitive IT management tasks, maybe saving a day a week, or improving business continuity with disaster recovery that takes hours not days.”
Murphy said you could reduce the cost of delivering an IT service by 50 per cent and run a virtual environment for a third of the cost of a physical environment. “You get away from having to schedule a complete server refresh every five years. Virtualisation is dramatically cheaper. Then there are the advantages around disaster recovery. A virtual estate can be restored in hours as opposed to days.”
Managed services are another area of activity for companies that have not diminished in the recession, partly because of job cuts. “A lot of companies have been forced to reduce the headcount of their IT staff and need to backfill roles very quickly. It might be a portion of the business or a complete outsource,” said Murphy.
A reality that both companies are learning to live with is the threat of lower margins, as organisations go to the market for more quotes and push harder on price.
“If you are just providing products there is less value to be had,” said Creely, “but our business is about doing work with the client at a presales level that you don’t necessarily get paid for. Customers recognise that and see the value of working with you – it’s all about relationships.”
