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Maximising value from the IT budget to achieve better business outcomes

i.t. technology business

According to global analyst firm Gartner, Australian spending on IT products and services is forecasted to hit AU$78.7 billion in 2015[1]. To boot, local firm Telsyte also recently revealed that more than half of Australian CIOs believe line of business IT spending will exceed central IT spending within five years[2]. Indeed, as technology becomes directly linked to business outcomes, this has also inadvertently led to the increasing reliance on IT as a key strategic advisory.

Evidently, it has never been more vital than now for IT professionals to identify ways that can help the company as a whole make more intelligent business decisions. Importantly, they need to determine the best allocation of resources by gaining a better view of their IT and whether they are truly achieving value for the organisation. Once IT teams can justify how technology spending aligns with key business objectives, budget approvals from the management can then be secured much more easily.

Here are six tips on how IT professionals can maximise their budgets to achieve better business value and intelligence:

  1. Build a ‘budget’ cheer squad in other departments

As software-as-a-service (SaaS) offerings continue to eclipse network-based applications for marketing, sales and finance executives, these departments are quickly becoming key influencers in the IT budget conversation. In fact according to Telsyte, 79 per cent of Australian organisations now have at least one line of business – including marketing, operations and finance – with its own IT budget[3].

In the first instance, it is important for the IT administrator to work with the senior management team to better understand the big plans on the horizon that can affect the organisation’s overall IT strategy. It should be the role of the IT administrator to then educate the senior management on the value of the proposed investment, which serves to improve the performance of their services, i.e. better bandwidth for SaaS applications or regular teleconferencing.

  1. Cut the unnecessary hardware spending

According to Forrester, businesses are expected to spend more on hardware infrastructure this year, making up 16 per cent of the average IT budget. The increase has primarily been driven by the growth of BYOD and mobility in the workplace. Specifically, many organisations are increasing their purchases of tablets, smartphones and PCs to keep up with employee demand for the latest products in computing[4].

Nevertheless, despite significant employee demands for the latest technology updates, organisations should still strongly consider their budget allocation on these items – especially workstations and peripherals, which are often costly yet non-essential. Instead of replacing older models or malfunctioning equipment with a new purchase, organisations should always first look at existing resources to identity potential solutions. For instance, inexpensive network monitoring tools can tell an organisation what devices are being utilised and thus what can be repurposed or sold if necessary.

  1. Keep suppliers in check

It goes without saying that when an organisation spends money; it should always make sure it is getting what it pays for. To ensure this, an organisation should monitor data, which includes bandwidth speeds, data transfer history, equipment and SaaS uptime. These can then be used to make sure that guarantees and service level agreements (SLAs) are being met – if agreements are not met, it provides an opportunity for the IT professional to ask for a discount and hence further reduce budget expenditure.

  1. Maximise bandwidth

Organisations should always ensure bandwidth is being used properly before making a decision to increase their plan with their service provider, especially in remote locations that rely on expensive satellite or leased line connections. Flow monitoring can help in identifying peak usage, as well as unusual usage, which include misuse or where changes in behaviour can lead to reduced usage.

  1. Make a case for the big purchases

While Gartner predicts that IT spending in Australia will grow by 4.2 per cent compared to last year[5], asking for major hardware investments or large outsourcing agreements requires more than just a line in the budget and should be considered carefully. For example, to justify new and often expensive storage investment, organisations should identify trends or underperformance within their existing storage and memory capabilities, which can be detected by monitoring tools.

  1. Scaling up to a virtual environment

According to Telsyte, the total market value for public cloud infrastructure services is set to reach $650 million by 2018, up from $305 million in 2014[6]. Yet, as most organisations that are ready to upgrade their environments to include virtualisation technologies will realise, this can be an expensive initial investment and a complicated sell to the executive team. Before jumping on the cloud bandwagon or adopting a virtual machine (VM), organisations should evaluate current data to show the number of active applications and servers, as well as model how VM will improve investment in servers and storage.

About the Author:

By Andrew Timms, Senior Sales Manager APAC at Paessler AG

[1] Gartner, ‘Gartner Says the Digital Economy Will Push Technology Spending in Australia up 4.1 percent to A$78.7 Billion in 2015’, http://www.gartner.com/newsroom/id/2913217

[2] Telsyte, ‘22% of all IT spending by Australian organisations now from lines of business outside IT’, https://www.telsyte.com.au/?p=2737

[3] Ibid.

[4] Forrester, ‘Benchmarking Australia And New Zealand Technology Budgets In 2015’, https://www.forrester.com/Benchmarking+Australia+And+New+Zealand+Technology+Budgets+In+2015/fulltext/-/E-res119541

[5] Gartner, ‘Gartner Says the Digital Economy Will Push Technology Spending in Australia up 4.1 percent to A$78.7 Billion in 2015’,  http://www.gartner.com/newsroom/id/2913217

[6] Telsyte, ‘Cloud Infrastructure-as-a-Service (IaaS) taking Australian enterprises by storm with annual spending increasing to $650 million by 2018’, https://www.telsyte.com.au/?p=2418