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Companies that do invest these savings enjoy 10% higher productivity than the pure cost-cutters, the survey of 161 European CIOs finds.
“Productivity growth in the US in 2005 was 1.8%, but actually fell in Europe. We are winning at cost cutting but losing at productivity and need to address this issue as a matter of urgency,” says Gilles Camoin, vice-president of Capgemini Consulting.
The bulk of spending - 87 cents in every IT euro - goes on low-value, back-office tasks such as support, infrastructure and applications management and testing/roll-out. That leaves just 5% for strategy and planning and 8% for conceptualisation and design.
Despite money saved on outsourcing these back-office tasks, strategy and planning will only see an extra 1.2% of budget over the next two years.
The offshoring tide shows no sign of abating. By 2008 47% of European firms will outsource or offshore their IT, says Capgemini