Little spending on new IT initiatives by Australian companies

Peter Dinham
Friday, 27 March 2009 18:51

IT Industry - Deals

A survey of Australian companies by Compuware has found that 75.5% of IT budgets are being spent just "keeping the lights on" or maintaining existing IT applications, with only 24.5% spent on new IT initiatives.

Compuware says the survey also revealed that overall IT budgets for 2009 have been cut in real terms by 73% of Australian organisations, with only 10% having had IT budgets increased above the inflation rate.

According to Brett Lightfoot, Compuware's manager, technical services, ANZ/Japan “something has to go -- but what? The danger is that new IT initiatives -- even money-saving ones -- will bear the brunt of cuts and an even bigger proportion of budgets will be sucked up maintaining existing services.

“But, cutting new IT initiatives is a false economy,” says Lightfoot, and he maintains that there are, in fact, “ typically many more opportunities to cut existing low-value or no-value (e.g. duplicated applications) IT services than new ones. After all, they make up 75.5% of IT budgets.”

However, Lightfoot says the problem is knowing what IT applications to rationalise or eliminate, because organisations typically have hundreds of existing applications and limited visibility into their business value.

The survey by Compuware found that only 20% or fewer Australian organisations could calculate key financial measures relating to IT assets and services at any point in time.

Lightfoot says the alternative to flying blind is a best-practice discipline called Application Portfolio Management ( APM), and on 1 April Compuware will ‘jump-start’ APM initiatives with the launch of a pre-configured version of its market-leading IT portfolio management solution, Changepoint.

Compuware says it is not uncommon to achieve a 10% efficiency saving just from the improved visibility that Changepoint provides, and it claims that the APM Accelerator has dramatically reduced the time to achieve these and further savings.