I’ve been thinking a lot recently about what the potential impact may be to new IT projects with the recent credit crunch. Some believe that there will be increased belt tightening in business in general, with few new capital projects being approved.
Is this the opening that we should be looking for to introduce SaaS applications?
I don’t think it will be. In the past, some basic primary research that I did, suggested that over 80% of ICT budgets was used to support existing systems. Out of the remainer of that ~20%, a similar percentage was spent on enhancements to existing systems. So if a capital project is required, to upgrade existing systems, the path of least resistance will be used to reduce risk. The status quo will be maintained to preserve existing operations.
What I’m looking for is those variables that are going to suggest a reduction in Op Ex budgets.
To me the driver is about improving the operating efficiency of business to allow them to compete more effectively against their competitors. So a smart business to me, will be looking to offset capital and op ex costs to get an edge at the moment whilst their competitors are distracted. So these businesses that break with tradition and use SaaS based applications, may just achieve that.
If you think you have spotted some doing just that, let us know.