IT: Cost Center or Business Enabler?

In this difficult economic environment, it’s easy to see why many companies will look to slash 2009 IT budgets in an effort to reduce costs and streamline operations. While this may be justifiable in some instances, it shouldn’t be a given that IT is a wise area in which to cut spending. Case in point:  In a recent keynote address at the Gartner Symposium/IT Expo, John Chambers stated that Cisco will increase its IT budget for 2009 as they look to increase productivity and cut travel expenses through the use of collaboration tools. Chambers noted that internal use of collaboration and Web 2.0 technologies has helped Cisco save over $150 million on travel costs. In addition, Chambers said that IT managers need to look closely at the use of blogging and video collaboration as a way to reduce long term expenses and gain near term competitive advantage (source:eWeek).

Other leading companies are doing the same. Difficulty breeds distinction, and as the saying aptly states, “When the tide goes out, it’s easy to see who’s been swimming naked”.

In short, companies that view IT as a strategic business enabler that can reduce overall costs and increase productivity are using this economic downturn to ramp up innovation and take market share from less savvy competitors who are forced into slash and burn mode.

While cutting IT costs now may seem to be an easy short-term band-aid, it most likely will have negative long- term consequences as stronger, more able competitors use the mismatch to leapfrog ahead. By the time the business environment actually improves, most of the weak players will be too far behind to catch up.

Undoubtedly, this is one of the most challenging business environments in decades. In spite of these challenges, however, it is also a time when great companies will seek to turn short-term obstacles into long-term opportunities.

About MC+A: MC+A is a leading IT solutions provider.  We work with clients seeking to leverage and extract the business value of a well planned IT strategy. Our core focus includes helping companies create, find, share, and protect their business intelligence assets in a way that reduces overall costs, improves efficiency, and drives more revenue to the bottom line.  For more information, please contact us.

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