IT departments that continue to spend more than 50% of their budget on maintaining existing systems could be compromising the competitiveness of their companies and their ability to deliver good customer service.
According to John Abel, business director, engineered systems at Oracle, companies that thrive today are those that successfully innovate to harness the technologies that customers use to buy products and services.
Addressing a gathering of CIOs in Dubai, Abel said: “The back office as it exists today is simply not equipped to provide the horsepower to manage the transactions and provide the information needed,” said Abel. “Today IT shops on average use only 13% of their budget for transformational projects, and 67% on maintenance and “keeping the lights on. Given this budget split, one could say that the core business of many IT departments today is maintenance rather than supporting the new way of doing business.”
Transforming the data centre is essential if it is to support the company’s efforts to do business with customers in the way they choose. “The gap between a customer’s buying decision and the actual point of purchase has been reduced to a matter of minutes, rather than the days or hours it took in the past to walk into a store, or a travel agent or a ticket office,” said Abel. “As importantly, the customer can express their opinion of the buying experience immediately, online, and to thousands, sometimes millions of people. Companies attempting to manage both these elements of their business with their current IT architecture will find the cost of creating extra capacity unmanageable.”
“Today businesses need to give customers multi-channel acces to their business, listen and respond to them via mobile, online and social media and analyse data to allow them to be proactive rather than reactive to market shifts. This will require more power, more storage, more capacity, but without spending more money,” said Abel. “It can be done by investing in systems in which hardware and software are engineered to keep maintenance and testing to a minimum and maximize power, all at a substantially lower cost. “Increasingly we are seeing software being driven deeper into the silicon of hardware.”
In addition, Oracle pre-integrates its software to work more efficiently with the hardware on which it runs; the result is a system that is pretested, preconfigured and tuned for maximum performance before it reaches the customer. By removing this burden the cost of running an engineered system is dramatically reduced, management is easier and reliability is improved significantly.
The subsequent freeing up of budget previously earmarked for maintenance opens up potential to transform their IT organization into one that is fast to respond to changing customer demands, and has the ability to adopt new technologies to support new business channels.
Shaimaa El Nazer
Senior account executive
Four Communications Group FZ-LLC
+971 2 447 2774