IntroductionThe current economic crisis has had a major impact on how enterprises allocate their IT budgets. Despite the fact that shrewd investments in services will provide immediate cost savings, enterprises are still reluctant to spend, requiring greater proof of realistic return on investment in the short- to mid-term and taking considerably longer to make final decisions before getting projects up and running.
Offerings that are increasingly attractive are focused on cost savings, strong business benefits, governance and risk reduction. Now that companies are scrutinising their overheads, many of today's major international organisations are starting to realise that more effective management of print procedures and document archives will save them both time and money, although they often have no concept of the magnitude of that saving.
An economic downturn will usually push expenditure to operational (opex) rather than capital expenditure (capex). The major reasons for this are:
- Greater flexibility, less cost: Opex-based spend allows budgets to be cut or increased faster and with fewer penalties and costs. It also allows new services to be bought and deployed more quickly and more easily. A utility pricing model — where a single invoice is generated on a monthly or quarterly basis — ensures that companies pay for what they use.
- Less risk: Moving towards opex decreases the risk of infrastructure overcapacity and consequently financial charges.
- Budget constraints or reluctance to borrow to fund investments: Avoiding assets on the balance sheet lowers an organisation's need for raising equity or taking loans to finance the assets. Consequently opex-based engagements become more attractive. This is also likely to drive interest for asset-based third-party agreements such as outsourcing and managed services.
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