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August 12, 2015

Beware the dollar, warns Gartner to CIOs making budget plans

CIOs are urged to reprioritise and complete projects within budget.

By CBR Staff Writer

Research and advisory firm Gartner has urged CIOs to reassess their budget plans to take account of a 20% rise in the price of dollar-based IT products for 2015 and beyond.

As CIOs prepare to plan their IT budgets for the next year, the research firm warned that prices of servers and software from US providers would increase in line with the strong US dollar.

CIOs in Europe can also expect server prices to increase by about 20% due to currency fluctuations.

Gartner research director Roberto Sacco said: "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 percent euro price increase on dollar-based IT products, and then make a plan to deal with it. This exchange rate challenge will be managed by good planning — not by rapid response."

Gartner said CIOs must have plans to reprioritise and complete projects within budget and that the approach does not only apply to the euro.

Sacco said any country whose currency has weakened against the dollar will face same conditions to that of Europe.

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"In situations in which there are differences in pricing power or strategic importance, some variations will occur.

"However, the central mechanics of the currency problem are similar."

Sacco warned that if IT leaders fail to take measures they will understand about the impacts of currency drift via proposal surprise, contract ambush and cancelled orders.

"Overspend will put other projects at risk, hence the need for CIOs to re-examine their budgets now," Sacco concluded.

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