August 2009
When entering into a new IT contract it all too easy to focus on the exiting and interesting parts of the new technology or service and forget to establish what will happen at the end. Failure to address what happens at the end of technology agreements can have significant cost and service impacts.
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We are in the middle of a significant recession and the last 12 months has been one of turmoil with the FTSE falling by 32%, the banking system in crisis and many well known businesses failing. Most businesses are therefore looking for ways to save money and “overhead” areas such as IT are often targeted. IT managers are used to “doing more with less”, as IT organisations have become more efficient, but how should IT respond now to demands for cost reductions?
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Almost 60 per cent of organisations in Western Europe will outsource more IT and business process functions in 2009, while renegotiation of existing contracts will rise to more than 60 per cent, according to a recent survey from Gartner, Inc.
So, outsourcing activity has risen as the recession has deepened, but is this the correct reaction, or are organisations just chasing cost reduction at any price?
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The Cloud definitely has a lot to offer plenty of organisations, some applications, like email are simply utility now, so I would recommend looking to the cloud for them. You would be hard pressed to provide the same for less than hosted and managed service providers are, considering the assured security, SLAs, backup, DR, mobile device support, anywhere access, the list goes on… What you should realise though is that your WAN and Internet connections become more important in the service chain.
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