I.T. Budget Getting Squeezed?

For CIOs who are in the midst of negotiating their budgets or feel they are being squeezed by CEOs looking to cut I.T. costs, the data reported in Accenture’s second global IT performance benchmark research may help them fight back.

“Many of the findings in our survey of nearly 300 global 2000 equivalent enterprises can be used by CIOs to state their case for the organization’s continued investment in I.T.,” says Bob Suh, Accenture’s chief technology strategist and the executive who headed up the study. “CEOs need to get real about investing to catch-up, and CIOs can help them justify this decision.”

According to Suh, the survey provides CIOs with ways to protect their I.T. budgets:

1) Customer-facing systems were found, according to the Accenture research, to be among the lowest scoring and the poorest performing. In contrast, financial systems have scored the highest. Businesses defined as “high performers,” who allocate the same proportion to customer-facing applications, have invested in new technologies and in integrating customer applications that have met 90 percent of their business needs.

2) Cutting the fat from today’s already lean I.T. budgets cannot be done easily. The 2007 study showed that the overall allocation of discretionary and non-discretionary spending has barely budged compared to 2005. The study also shows that as an organization embarks on new technology investments, it should expect spending more of its time in I.T. operations as its optimized I.T. environment has been disturbed.

3) The study shows that for the first time, enterprise technology has fallen behind consumer technology. The best technologies are used at home first, and the company is struggling to keep up.

4) Consumers expect more and are savvier than ever before, and they can now vote with their mouse clicks.

5) People responsible for maintaining legacy systems are headed toward retirement. Research shows that the oldest modules of front office systems driving profitability are among the oldest in an organization’s portfolio. They average over six years old (with some surviving code written in the 1970s) and have survived well past their expected lifespan.

To access the full report, visit the Website http://www.accenture. com/Global/Research_and_Insights/By_Role/HighPerformanc e_IT/CIOResearch/HPIT2008.htm.

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