Author: Kevin Donoghue, CEO - Telesoft
Gartner just released a new report indicating that IT spending for the balance of 2016 will decline by two percent. In addition, they have revised their Worldwide IT spending forecast from 0.6 percent growth to a drop in spending of 0.5 percent – a rather large change when talking about billions of dollars in annual spending.
The downward revision in IT spending also calls for a 3.7 percent drop in spending on device hardware (i.e., PCs, tablets, and printers). The report indicates that the declines are due to global saturation in the smartphone market, and an undercurrent of economic uncertainty that is prompting companies to cut IT spending amid “geography-specific worsening economic conditions.” The one area for growth that it continues to identify is spending on mobile data which is being driven by mobile apps, pricing on bandwidth, and 4G/LTE network availability.
These global forecasts may not reflect the conditions and budgets for every enterprise, but there are some clear lessons that do apply for all organizations. First, budget cutting is continuing for IT and telecom expenses. This means that all organizations must have a proactive program to manage current spending and meet these cost reduction expectations.
Second, managers of Telecom Expense Management (TEM) and Enterprise Mobility Management (EMM) programs need to be prepared to justify their programs. Often, budget cutters only see these programs as line item expenses with no idea of the benefits and savings they produce. In the current environment, TEM and EMM need more attention and in some cases additional funding to increase their scope and effectiveness. Relative to the overall budget for telecom, the costs for TEM and EMM are small, but they can have a dramatic impact on cost savings.
Finally, one of the best ways for enterprises to reduce spending on hardware is to increase the time before employees are eligible for a new smartphone. As most carrier subsidies are being reduced, the costs for devices will take a bigger bite out of the budget. Automated portals for ordering mobile devices can track service dates, and prevent executives and other employees from pressuring gatekeepers to bypass eligibility policies.
The Gartner report makes it clear that budget cuts are here to stay and managers need to be prepared to defend their programs and demonstrate they are critical for success. In this environment, TEM programs enable organizations to make smart cuts and navigate the necessary changes.Tags: telecom expense management (TEM)