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CIOs Will Cut Costs, not Projects
By Sonal Desai
Mumbai, Jan 02, 2009 1648 hrs IST
The customer and competition are at the back of the mind of all Indian CIOs who are currently penning IT strategies, and listing their priorities for 2009-2010. Slowdown is also altering the manner in which the CIOs will have to spend rupees in projects.
As the IT head of a large fast-moving consumer goods company said, "All the IT investments are customer focused. And this goes across industries. Enterprises in this segment are looking at increasing user productivity, essentially how to automate processes to reduce manpower."
Cost-cutting, virtualization and Green IT will be at the top of all CIOs heads, said he.
Retail is one vertical that would continue to invest in IT, said Arun Gupta, CIO at Shoppers' Stop. While some retailers are looking at the operational system, a few are also evaluating analytics. There is no particular trend in IT investment across the industry.
"IT provides one of the differentials to any retailer. Stop the investment, and you are likely to lag behind. At Shoppers' Stop we are cautious in our IT spend as compared to the past. But we will use the money to increase usage and benefits from data warehouse, look at new tech capabilities such as mobility based solutions, RFID, etc. to build for the future, and enhance automation in processes that do not fully leverage technology."
One organization that will focus more on its front end is the Airports Authority of India. N.B. Mathur, GM IT at AAI, said, "Our priority is to modernize all airports. We want to integrate all facilities, create a control room and a central database. Our aim is to have common infrastructure."
Diptarup Chakraborti, principal research analyst at Gartner, said that the CIOs should leverage the slowdown to experiment with newer technologies, identify investments on new projects, as also evaluate the necessities of critical projects.
"Instead of cutting projects, CIOs should look at cutting costs. Amidst pressure from the management, he should prioritize projects. He can also negotiate harder with the vendor and ask for better deals and value-adds. This is the time to lap up opportunities and tap competitive technologies."
Contrary to common belief that the new projects should be kept on hold, Chakraborti said, CIOs this year should start more projects. This is the best time. More people should be recruited. "In-house, invest in enhancing skill sets of own employees. These skill sets will later become assets and the CIO would be able to calculate the rupees or dollars spend on these trainings.
"A CIO will look at technologies like virtualization or cloud computing, use your own PC, outsourcing total maintenance, Green IT, and RFID in 2009-2010."
"The primary objective of all CIOs will be to cut cost and to help the business cut operational cost. I have spoken to various CIOs, and I am echoing their sentiment. The CIOs are of the view that whenever an enterprise takes cost-cutting measures, the primary target is the IT department. Most enterprises feel that the IT cost can be deferred," said Satish Pendse, CIO at HCC.
And so, amid tight budgets, a lot of CIOs will opt for virtualization, essentially to save cost on hardware and real estate. "As far as my industry is concerned, we will largely tap the GPS and the GPRS technologies," he said.
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