Hitachi Data Systems Malaysia managing director Johnson Khoo said the regional survey, conducted last November, showed that chief information officers (CIOs) facing flat or diminishing budgets need to evaluate technology purchases on longer term economic merits, as well as upfront costs.
"Ongoing global economic problems in 2009 could reduce IT market growth from 5.8 per cent to 2.3 per cent in 2009, according to Gartner," said Khoo. "Many companies are reluctant to spend. The problem is further compounded by the shortage of talent due to a tight labour market over the past few years."
"As we brace for tough times ahead, it is reassuring to know industry experts such as IDC are of the opinion that of all the hardware categories, post crisis forecast suggest that only storage is likely to have positive growth in 2009," he added. "Fifty-seven per cent of CIOs stated that they would not reduce their storage investments."
Cutting costs, but still grow the business
Khoo said that the CIO is caught up in a classic situation where he has to cut costs and grow the business as well. "The dichotomy is better managed with a clear understanding of the business environment, the costs incurred and the implementation of solutions that provide the CIO with the mean to maximise organisational performance, effectively."
"Because of the way storage is packaged, businesses end up buying up to 75 per cent more capacity than they actually need" he said. "It's cheaper to simply buy more storage than to hire somebody to manage it, so an organisation's first response to a storage crisis will be to throw more storage at the problem."
Focus on ROA as well as ROI
"However, reduction should not be the only plan as maximising each dollar spent is equally important for ushering in positive changes," he said. "In these disruptive times, measuring ROI (Return on Investments) to gauge the savings achieved on the metrics mentioned is not enough and accurate since it is primarily based on new assets being purchased and doesn't take into account the existing assets that may be of value."
"CIOs need to measuring IT spend against business revenue trends and ratios by taking ROA (Return on Assets) into consideration is a more strategic approach as it considers the impact of an investment on the total asset base rather than a specific project," said Khoo. "Measuring ROA makes existing assets more efficient and productive and it is important, that IT organisations to develop a common set of metrics that allows companies to scrutinise a wider range of building blocks to help them to calculate their true ROA."