Directors under pressure to do even more for less

A survey of IT directors finds no need to upgrade as budgets remain flat

A survey of IT directors finds no need to upgrade as budgets remain flat

IT directors are bracing themselves for a year of falling IT budgets and "doing more for less" but are hampered by poorly aligned business and IT strategies, according to a recent survey.

Nearly three-quarters (70%) of the IT directors and managers polled at the 2003 IT Directors Forum in May felt IT budgets would remain static or decrease over the following year.

Respondents gave their three most important business challenges for the year as aligning IT with the business, change management and getting more for less. Mobile computing, security and integration were the three most important technical issues.

"I would say my budget has gone up slightly in monetary terms but it is probably remained static in real terms," said delegate Peter Bailey, head of IT and technical services at the NHS Health Development Agency.

"Doing more for less is definitely where we are heading," he said, adding that mobile computing, staying on top of security and improving disaster recovery are his three key focuses at the agency this year.

For Ben Booth, IT director at market research firm Mori, "It is a case of doing more with the same not more for less." He said his IT budget has remained static although the business grew by 5% last year. Going forward, the key will be to "consolidate, keep it cheap, simple and reliable - then focus on areas where you can get competitive advantage", he said.

"I see the main business challenge as delivering value to the business," said Booth, who feels that the idea that IT needs to become more aligned to the business is old hat.

Similarly, Frank Berridge, IT director at retail chain House of Fraser, said his IT function was already closely aligned with the business, although he agreed with the inclusion of the other two choices in the top three.

"Change management is often overlooked and getting more for less is always a priority. All of us have to get the best possible return on investment from IT," he said. But the biggest issue for Berridge is the quality of third-party software. "From a technical point of view that has caused us the most headaches," he said.

Other core technical focuses at House of Fraser include web services and Voice over IP. For Mori, mobile computing is key as two-thirds of its staff are in the field.

There was also noticeable support among respondents for open source software. Although half (46%) said they had not implemented open source software, such as Linux, at all, 18% were evaluating it, 12% were running pilot projects and 21% said they were using it routinely, particularly for internet-related projects. Two respondents said they had fully deployed open source throughout their organisations and 3% had fully deployed it in one or more departments.

Open source was also given as one of their three most important technical issues for the year ahead by 18% of respondents.

Bailey said he would like to look more at open source but does not feel able to at the moment. However, Berridge and Booth were less enthusiastic. "We have looked at open source but we don't believe it is as cost-free as some people believe and we are very heavily into Microsoft on the desktop," said Berridge, although he added that he had not ruled it out.

"My view is it is potentially useful in specific areas but otherwise in a corporate environment I think it is very high risk and I don't think the projected savings are there," said Booth, who said the amount he spends on Microsoft licences only accounts for about 2.5% of his IT budget anyway. "I would consider it if we had an enormous web presence, but we don't."

Another finding to come out of the research is that the internet continues to be a core focus. Half (48%) of respondents felt online projects would take up a bigger part of their IT budgets in the year ahead.

Way down the list of priorities for delegates at the forum was Windows 2003. Nearly three-quarters (71%) said they had no plans as yet to upgrade to Microsoft's new platform. "There is no business advantage I can see in being an early adopter to this," said Booth, although he intends to upgrade eventually.

Mori is still rolling out Windows 2000. However, House of Fraser aims to have a Windows 2003 server in place by August and Bailey said the NHS Health Development Agency is to start training its IT staff this year in anticipation of a move to 2003.

The survey was carried out by Richmond Events, which organises the IT Directors Forum.

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