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Friday, January 30, 2009
Inside Finance
Tips for IT efficiency in a volatile economic environment
The Murphy brothers' software-selling family tree
MHT managing editor Rodney Brown on NECN: 22 tech companies give back to community
MHT Editor Doug Banks on NECN: How companies are using social media
The global economic crisis leaves business leaders, specifically CIOs, grappling with reduced IT budgets and increased pressure to deliver an efficient, yet powerful IT infrastructure to support business objectives. So how can a CIO possibly meet these expectations in a financially constrained economic environment?
Here are some tips that may help IT decision-makers through these challenging times:
Look at leasing as a solution to financial concerns:
Leasing helps conserve capital — there’s no down payment and you pay only for the use of the equipment, as opposed to paying for the equipment itself. Incidental costs like sales taxes and installation charges can be bundled into the lease instead of being paid up front. Leasing makes it easier to expand or renew your IT infrastructure outside of budget cycles. By returning equipment to the leasing company at the end of the lease term, you can eliminate concerns about disposing of it in a secure and environmentally responsible fashion.
Consider a sale-leaseback option for financing IT equipment:
• Sale-leaseback allows you to sell existing IT assets to an IT equipment services financial provider and lease them back — realizing an immediate infusion of cash which can be used to pay down debt or invest in other areas of the business.
Manage IT assets on a portfolio life-cycle basis to gain the greatest return on investment:
• Simple concept — older equipment results in a more complex environment, less innovation, a higher labor cost, less efficiency, less compatibility and a lower return on investment. Developing a framework for systematically retiring and replacing IT equipment on a recurring basis is a cost-saver. A systematic ongoing replacement plan for the IT environment that anticipates migrating to new generations of equipment at programmed intervals is efficient and less expensive. Replacing PCs, servers, and other IT equipment one piece at a time when it fails is expensive and inefficient. IDC research shows that optimized replacement practices can reduce PC replacement costs by as much as 75 percent, or $400 per unit.
Three questions to ask before entering into a large, complex financing deal?
• Is your potential supplier interested in working with you as a partner, or just selling product? Has your potential supplier worked with you to identify a total solutions approach to your business needs, or just focused on the rate? Does your financing partner have a solid foundation in information technology and a documented history of helping customers achieve their goals?
Tom Adams is vice president and managing director for Hewlett-Packard Co. Financial Services’ Americas region.
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