Why Consolidation Still Hampers CIOs

And sometimes things are hard just because they are hard. Whether it’s server virtualization, the demands of green IT or storage innovations like data deduplication, the consolidation equation is growing more complex. Technological advances over the last few years have made integral elements like servers and storage even more intricate. For CIOs, that requires not only greater technical proficiency, but also greater leadership in selecting technologies and implementing them efficiently.

This has serious implications. Bob Suh, chief technology strategist for Accenture, says U.S. companies are falling behind global competitors in IT leadership, partially because of infrastructure decisions. European and Asian businesses tend to build from the ground up with newer technologies, Suh says. U.S. companies, on the other hand, invest in strengthening existing systems. Newer systems are easier to implement and integrate, which helps move more business processes online. That boosts productivity—and outperforms refurbished systems, Suh says.

Unfortunately for CIOs, consolidation is a problem without definitive solutions. But there are a few things they can do. The first is to get ahead on emerging and innovative technologies in servers and storage. That means boning up on the newest developments in the space, as well as hiring (and retaining) specialists.

Maybe things won’t get as bad as some predict. Not everyone’s predicting gloom and doom for IT budgets: Our IT spending survey found that IT spending is down, but not out. Various other reports show spending forecasts shrinking, but there hasn’t been a clear indication that costs will have to be cut. Things do seem to be heading that way, though.

If they do, CIOs need to recognize that cutting back on a major element of the consolidation project could have a bigger downside than, say, doling out funds for a test-run on an emerging technology—unless those new investments can yield formidable paybacks in a timely fashion.

In any case, CIOs need to take control of their consolidation projects and their own budget logic, before someone else takes control of their budget for them.