As currency changes make tech products more expensive, Gartner says CIOs need to re-examine their budgets.
In the last year, the Euro, Japanese Yen and Brazilian Real have all dropped by about 20 per cent against the US Dollar, and according to Roberto Sacco, Gartner’s research director, that is likely to remain the case at least until the end of 2016.
Sacco says that means CIOs cannot afford to be complacent. “As the CIO, the most important action is to review your project plans through the second quarter of 2016. Assume there will be a 20 per cent Euro price increase on Dollar-based IT products, and then make a plan to deal with it,” he said.
These currency fluctuations will affect all US products from servers to software and there will be no room for negotiation, as manufacturers will not sell products at a substantial loss.
“Suppliers are currently repricing in local currencies. In an attempt to obfuscate this, they are also re-bundling — changing the mix of included modules, such as training and installation assistance,” said Sacco. But CIOs may only notice the price shift when their contracts come up for renewal.
According to Gartner, European software providers may also raise prices to maintain market rates.
Sacco warned that without reassessing priorities, CIOs could find themselves ambushed and out of pocket. “See where you can minimise the impact of these changes, look for other opportunities to cut costs and identify the risks, opportunities and funding that the plan exposes. Validate the plan with stakeholders, then work with the CFO to close any remaining gaps,” he advised. ®