Improving IT efficiency for medium-size companies

Midsize enterprises need to take a more strategic approach with their IT spending

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.

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