IT needs to do more with less

Businesses want to get double the productivity out of their IT systems, at half the cost, says Gartner VP and fellow Mark Raskino.

Speaking at the Gartner Symposium/ITxpo 2008, in Cape Town, Raskino presented his thoughts on a new trend he has noticed, that of IT using its own tools to become more productive and making a more effective contribution to an organisation's bottom line.

In fact, the trend is so new that the full Gartner research note that will go into more detail will only be released later this month. This is counter to the way the research firm usually releases information on a trend or new finding.

The importance of this trend, according to Raskino, is that enterprises have to find a way to cut their IT costs, especially during the current time of the global economic slowdown. And they have to do that without compromising their ability to be innovative.

"During the 1990s, we saw IT budgets rise 15% annually every year. After 2000, we saw flat IT budgets until about 2003 and then we saw marginal increases in the budgets, but nothing to get excited about," he said.

Following that trend, Raskino said, many organisations are looking at cutting their IT budgets by 30% to 50%, depending on the size and complexity of the issues they deal with.

Raskino said the cut in budgets does not necessarily mean a cut in productivity and pointed to the increase in productivity of the agricultural sector in the last 100 years.

"In 1830, 95% of the people of Britain were involved in agriculture; now it is less than 3%. It shows that, as an industry matures, it is able to do more with fewer resources," he said.

Raskino's history of IT productivity shows that the period from 1960 to 1988 was the era of "simple" information system creation; 1988 to 2000 was the era of integrated business system value creation; the period from 2000 until now is the time of diminishing IT returns; and the years following the present until about 2015 will be the time of rising IT productivity.

Some of the solutions that Rasinko points to, that could enable IT departments to remain innovative in the face of declining budgets, are making use of cloud computing, outsourcing mundane tasks and getting over the fear of losing control.

Accenture director Clive Butkow, who believes South African companies have not embraced the full benefits of business process outsourcing, echoed his comments.

Butkow said research by Accenture shows that, in times of an economic downturn, companies tend to cut the discretionary budgets of their IT departments in favour of keeping the operation's budgets constant.

"But this does not benefit the company in the longer run as it creates what we call a capability gap, in that the company is unable to innovate as it is spending so much money on just keeping its infrastructure running."

Butkow noted that, by outsourcing as much as possible of a company's daily tasks or infrastructure needs, the discretionary spending that funds the innovation is kept going.