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Tuesday, July 13, 2004

IT Strategy and IT Spending

First, let me apologize in advance for spelling mistakes I make this morning. I am writing this from my BlackBerry. I'm watching an early morning storm out over the Gulf of Mexico...glad that I'm not on a boat somewhere in the middle of it. But I digress...

In the 80's and 90's no one would dare create an IT strategy without including double digit percentage increases in IT spending. While this approach may have led to some pretty nice systems, it did little to help companies' bottom lines...more likely increased IT spending hurt bottom line profits.

Today we have to take a different approach. I like to look at it as a stewardship approach. We have to carefully consider how we utilize our most scare resource-cash. We in IT have to manage it and decide when and how to best deploy it.

Our corporate executives and boards want better margins...translation: less IT spending on needless upgrades and infrastructure and a closer look at IT spending as it relates to profits.

Fortunately for us (IT execs) the industry trend is lower overall technology costs. But, lower costs are not enough. We must also deal with vendors who want to sell us uneccesary products and services. And, in some cases, we have to deal with execs who want the latest in technology regardless of the cost.

My advice: stand firm. Don't deploy technology for technology's sake. Renogotiate existing contracts. Become vendor agnostic. And, don't let vendors and well meaning execs drive YOUR IT costs.

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