28 Feb 2012

The power of IT in a slowing economy

IMF chief Christine Lagarde has spoken of a potential “1930’s moment” unless Europe and its leaders take action to deal with the problems in the Eurozone.

Let’s hope that action is taken and the worst of the trouble is averted.

But if even some of the predictions surrounding GFC mark II do come true, businesses will need to be able to cope with lower demand.

Can IT help?

We think so. For one thing, almost all IT and communications technology is geared towards doing things more efficiently, whether through automation, systematisation or virtualisation.

For another, a lot of experience about how IT can help businesses during a downturn was gained during the last global financial crisis.

Managing IT in a downturn

When faced with worsening conditions, many businesses become averse to new investments, especially those involving large amounts of capital. This is understandable, if not entirely sensible. Businesses know they may need cash on hand to survive.

At the time of the last crisis, this meant that many new IT projects were non-starters – simply not worth the risk.

Now however, that equation has been changed by cloud computing. Indeed, a business looking to refresh an aging infrastructure can today avoid the prospect of a cumbersome capital expense by taking advantage of cloud technologies.

In addition to low up-front costs, cloud services also deliver flexibility: the ability to scale usage down, as well as up (giving businesses more confidence that their IT spending will match needs).

Combined, these features can make a cloud transition a smart move, even in a slowing economy.

What to invest in

From disaster recovery to Microsoft Exchange, to a complete, business-wide infrastructure, the services now available in cloud form are able to deliver on most needs.

That said, businesses will be looking for systems with fast and proven ROIs, as well as systems can cut their costs or boost productivity.

Obvious candidates are IT infrastructure or virtualisation projects. If your current systems are in need of a refresh, then cloud-based infrastructures offer a way to move to a flexible, op-ex funded service, rather than an inflexible, cap-ex heavy internal solution. (In addition to ensuring that your platform receives ongoing updates and upgrades, you’re also transferring risk).

Virtualisation allows you to make efficient use of your computing hardware by hosting several virtual servers on one physical machine. Depending on how efficient your current servers are, you can reduce your costs anywhere between 30 and 70 per cent.

Other solutions that can demonstrate quick productivity gains  are Unified Communications services. These make your business communications much more efficient through functions such as voice-message to email, and instant indicators as to whether or not your staff are at their desks ready to take a call.

Also important to revisit are your telephony costs. Today, some form of Voice-over-IP solution is a must, and you will save by revisiting the rates and plans your provider delivers at least annually, if not more often.

On the upswing

Another advantage of continuing to invest in and revisit your IT services as the economy slows is that your business will be leaner and faster to respond when conditions pick up again – giving you a break on competitors who have stayed in their shells.

Cloud technology has dramatically transformed the investment equation for all kinds of services. As businesses deal with what comes this way from Europe, be sure that yours considers them.

Stephen Sims is General Manager Sales & Marketing, Brennan IT

*** Article featured in the February 2012 edition of the voice ***