Medium-size enterprises should take a more strategic
approach to their IT spending to better align it with their
business needs, according to analyst, Gartner Group.
Gartner says only one-third of IT spending in medium-size
enterprises directly improves business performance.
Nearly two-thirds of the IT business in medium-size
organisations is spent on IT infrastructure, such as networks and
servers and utility applications, such as e-mail and payroll.
Gartner says that although many medium-sized companies spend
most of their budget on infrastructure, which is the foundation of
all operations, business unit managers often do not recognise or
appreciate the value of these investments and, therefore, their
view of IT departments is compromised.
"Many mid-size business executives have become disenchanted with
technology solutions that they do not perceive to deliver business
value," said Gartner analyst James Browning.
"This has led to low credibility in many cases, which carries a
high price for IT departments, including pressure on budgets and a
lack of resource commitments in an IT environment of scarcity," he
said.
The challenge for IT managers in medium-sized organisations is
that they are not always included in strategy meetings with
business managers on the goals for the company.
"The task of the IT organisation is to achieve a high level of
effectiveness at acceptable levels of efficiency and customer
satisfaction. This is best accomplished when planning is
interactive between IT and the business units," said Browning.