IT Investments: What IT Leaders are Whispering in Budget Meetings

Impact of the Financial Crisis

Survey subjects were asked if increased pressures resulting from the global financial crisis is making it more difficult for IT to deliver on its key business objectives.

40% agree
11% strongly agree
39% disagree

Will IT Projects Move to Individual Business Units?

Does the need for better performance and discipline in technology projects mean that responsibility for delivering IT projects will be increasingly delegated to individual business units?

45% agree
13% strongly agree
31% disagree

More Flexibility in IT Projects

IT is increasingly under pressure to deliver projects that incorporate more flexibility than before.

59% agree
22% strongly agree
14% disagree

IT Investments – On the Rise or Not?

Organizations approach to investment in technology in the next year varied:

Increase investment selectively: 47%
Hold investment levels constant 24%
Reduce investment selectively 15%
Increase investment across the board 10%
Reduce investment across the board 3%

Hot Technology Projects for 2010

Which types of technology projects are most likely to receive significant new funding over the next year.

Server virtualization and consolidation: 36%
Customer relationships and service: 34%
E-Business (online selling, supplier portals, etc) : 31%
Finance/performance management: 28%
Service-oriented architecture: 28%
Business process re-engineering: 24%
Data analytics 22%
Compliance and governance: 18%
Supply chain management: 17%
None: 6%
Other: 4%
Don’t know: 1%

How Will Business Leaders Measure the Success of IT Projects?

Over the next year, which of the following business outcomes will be valued most highly when evaluating investment into potential new technology projects in your part of the business?

Improved cost efficiency: 49%
Process innovation/efficiency: 29%
Creation of new channels to market: 21%
Enhanced knowledge/understanding of customers and markets 18%
Increased speed of action 17%
Increased security of operations 14%
Enhanced visibility of internal operations 10%
Increased employee mobility 8%

How has the Financial Crisis Affected IT Projects?

Since the onset of the financial crisis, what has changed in the way your organization views the requirements for new or existing technology investments:

The risks must be defined more clearly: 44%
Performance metrics are more important: 38%
Key performance indicators are defined more narrowly (eg. In quantitative terms) 31%
Required rates of return on investment (ROI) are higher: 30%
Required payback periods are shorter: 29%
Project status reports give greater prominence to business targets than previously: 25%
Frequency of progress reports is higher: 23%
Nothing has changed: 8%

Speed of Implementation – Is it Important?

In looking at IT projects, various drivers are of important, and speed of implementation is a hot button. Business leaders were asked if it’s important.

44% agree
21% agree strongly
24% disagree

How Much Did You Say That Would Cost?

Nothing got as much attention as reduced budgets in 2009. Business leaders were asked how important projects costs were in the overall evaluation of projects. Their answers show it’s still very important.

51% agree strongly
32% agree
12% disagree

System Flexibility

Another factor – how flexible is the system that is being implemented. Business leaders were asked if that was an important factor in the project’s approval:

35% agree
27% disagree
21% agree strongly

Date of payback

Yes, most business leaders agree this is an important factor in a project’s approval.

38% agree
26% disagree
23% agree strongly

Can We Count on the Business Outcome?

Business leaders said this was important too:

39% agree
27% agree strongly
22% disagree

The Ever-Important TCO

Is it important for the project to reduce total cost of ownership (TCO)?

34% agree
26% agree strongly
22% disagree

Best Ways to Reduce Project Costs

Which of the following are the most effective ways to reduce the costs of implementing technology projects?

Ensure that the initial project requirements remain stable throughout the life of the project 35%
Replace/rationalize existing systems 24%
Move to lower cost or open platforms 23%
Adopt new approaches to execution of projects’ software components (eg SAAS, open source) 21%
Get vendors or partners to reduce their fees 18%
Entrust project management and accountability to the central IT function 17%
Concentrate project management and accountability within one business unit (not IT) 16%
Assign more project tasks to staff in cheaper global locations 11%
Reduce the size of the project team 10%
Entrust more project tasks to vendors or partners 9%

View All Slideshows >