Top Global asset managers have predicted high CapEx growth in 2014. In fact, they have indicated the growth will be in double digits. The 2008 recession had caused the budget to be frozen and the desperate IT managers are anxious that the expenditure incurred in the fields of technology and communications is just not sufficient enough. This discrepancy has probably caused stagnation which can be leveled only by leap-frogging the next generation of technology.
Sweating Assets
Most businesses are confused about the future expenditure; whether they are to meet all the expenditure by themselves or to seek succor from resources outside. Cutting costs, making maximum use of the skills of the employees and optimizing the capabilities of the systems in place have all to be taken into account while analyzing data to decide the action to be taken. This sweating assets operation can be strategically a boon to financial aspects of business but in some cases, may turn out to be a failure.
New Technological Solutions
In the normal course, a technological solution is considered old if it reaches age 8 and if it is still being used, we can say it is only on an extended support. One can safely say that the system is not a complete solution but provides “best effort” only. Designing a computer program to support the system is not usually carried out.
Sourcing parts from grey market might, more often than not, lead to quality problems. Cost advantages notwithstanding, the question of quality is a major concern. The newly made old parts may be a complete disappointment in that they may arrive “dead”. The risk factor may increase manifold with these substandard parts.
Downtime Costs
A mid-size business may add up its downtime costs to $70,000 per hour, says IDC. Say, your business is in Detroit and the part you urgently require is manufactured in Mumbai, how many hours do you reckon you have to wait until the part gets to you? This downtime may prove costly in terms of customer relations.
Busy seasons
What about busy seasons? Can you afford to accommodate a downtime that spans days? And, if an upgrade is urgently called for, what is the solution? If it is asset sweating is the answer, how are the customers, employees and other stakeholders going to react? You must weigh sweating assets against allowing the ageing of a technology solution.
More Burdens and Cloud Computing
New apps are deciding how deployment and capitalization are to be carried out in organizations. These apps can no doubt increase the employee’s involvement and efficiency but there is also the dampener that spells more burdens for the company which already has to put up with burgeoning service demand. Add the shrinking resources and number of staff and your cup of woe is full.
Cloud based solution may be the answer. They can provide IT organizations with a communication foundation which will transform them into consumer from being producers. The thaw has made many IT companies sit up and chalk out a program to minimize the complications that crop up with sweating assets. The new technological advances and the apps may be chosen to replace the old ones and define a refreshed IT roadmap.
