VI­JAY SETHI, Vice Pres­i­dent and Chief In­for­ma­tion Of­fi­cer, Hero Mo­toCorp

InformationWeek - - Perspective -

Ex­change rate and fall­ing ru­pee is a ma­jor con­cern for most CIOs to­day. When we were do­ing IT bud­get­ing in Fe­bru­ary/March, ex­change rate was around ` 54 to a U.S. Dol­lar. To­day, the US Dol­lar has neared ` 66 – which trans­lates into a dif­fer­ence of more than 20 per­cent. This has led to sig­nif­i­cant in­crease in hard­ware costs (PCs, servers, stor­age etc) and soft­ware li­cense costs over last few months. This has put sig­nif­i­cant pres­sure on IT bud­gets.

While de­fer­ring IT pur­chase de­ci­sions may sound like an op­tion, but the fact is that at this time one does not know when and to what ex­tent the sit­u­a­tion will im­prove. Also, con­sid­er­ing the busi­ness needs and ex­i­gen­cies, one may not be able to de­fer IT pro­cure­ment de­ci­sions be­yond a point and one has to buy at higher rates. This does im­pact our IT fi­nan­cial plan­ning in a big way. An­other pos­si­ble op­tion one sees is try­ing to find sav­ings else­where (and that is also not easy).

While one may try to be op­ti­mistic and think, ‘ This too shall pass’ but the fact re­mains that plan­ning in un­cer­tain times has be­come a ma­jor part of a CIO’s role to­day. Some thoughts on what we can do in such times: We need to cat­e­go­rize all our projects and ac­tiv­i­ties into three ar­eas viz. (a) must be done (b) should be done and (c) could be done. Cat­e­gory (c) are not ‘nice to have’ but those which can be pos­si­bly de­ferred in case of bud­get pres­sures. While there may be few projects and ac­tiv­i­ties in cat­e­gory (c) — th­ese act as a kind of cush­ion in case of ex­i­gen­cies. One needs to be flex­i­ble and up­date/re­vise IT plans much more fre­quently — may be quar­terly rather than an­nual or half yearly as has been prac­ticed over the years — and also re­visit cat­e­gories (a), (b), (c) as above ev­ery quar­ter. Try to make the ex­penses vari­able wher­ever pos­si­ble — cloud com­put­ing is an op­tion in that di­rec­tion. One should lever­age other tech­nolo­gies like vir­tu­al­iza­tion to re­duce phys­i­cal num­ber of de­vices and in some cases even en­hance the use­ful life of equip­ment. Fi­nally, it is not just the IT func­tion, which is get­ting im­pacted by the ex­change rate but the en­tire com­pany. So, the CIO should work closely with other func­tions and look at ways and means in the en­tire or­ga­ni­za­tion where IT can help save more costs. While re-ne­go­ti­at­ing con­tracts is a pos­si­bil­ity to save costs, in my view that has noth­ing to do with ex­change rates — that is part of role at all times and one should re­visit con­tracts pe­ri­od­i­cally to en­sure that costs and ser­vice lev­els are op­ti­mum.

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