European survey results confirm widespread ignorance in Europe regarding it systems cost survey

In a recent survey conducted by market analysis experts, Datamonitor, on behalf of a number of companies including PeopleSoft, worldwide eBusiness solutions leader, results show that almost half of European businesses are unaware of the cost of running their IT systems.

In the survey, one hundred and ninety-one IT and business managers in medium-sized enterprises across Europe were asked `Do you know the real cost of running your IT system?` and a staggering 45% of IT managers said that they did not know. The respondents came from seven European countries (France, Germany, Italy, The Netherlands, Spain, Sweden and the UK and Ireland), and seven vertical markets sectors: agriculture, financial services, industry, manufacturing, services, trade, and transport and communications.

The regional division did not vary drastically, although Italy led the way, with 70% of its respondents saying that they knew the cost, and Sweden following, with 65%claiming the same. In all other countries the respondents were split in their awareness of IT system costs. In Spain 56% said they knew the cost in the UK and Ireland - 53%, in The Netherlands - 50%, in Germany - 47%, and finally in France - 46%. With half of European businesses unaware of their IT costs, they will clearly not be able to state the return on investment they would want to achieve with hosted application services.

Datamonitor Analyst, Daniel Grundy, adds: "The ability to save money is the clear motivation behind IT managers wanting to use ASP offerings. However, the fact that these IT managers seem unable to say how much they currently spend means that demonstrating ROI will be difficult. That said, if employing an ASP solution proves to be simpler, as well as easier to manage and maintain, then it will also appeal to the busy IT manager."

In the breakdown by market it came as no surprise that 85% of those questioned in the financial sector knew the cost of running their IT systems. The transport and communications sector was also high, with 85% aware of the total cost. Results were low in agriculture (33%) and industry (38%), however, which tallies with a lower level of IT usage in this sector. The trade (57%), manufacturing (55%) and services (55%) sectors were not certain that they knew the cost of running their systems.

Whilst many IT managers from the sectors were not aware of the cost of running their IT systems, 61% believed that better cost management would compel them to outsource applications. Although this indicates that money is a key motivator, the low level of awareness regarding IT costs in Europe fundamentally limits the ability of ASPs to use this as an argument when pitching for business.

It also implies that any information which vendors can shed about the cost of legacy systems during the due diligence stage of a proposal may indeed be a key to winning business.

Andy Sims, ASP Strategy Director for PeopleSoft Europe, Middle East and Africa, comments on the results. "It is shocking that such a vast amount of IT managers across Europe are unaware of how much they are spending on running their systems. ASPs need to be clear on the pricing as well as the intangible benefits of an outsourced solution."

He continues, "The results this survey shows offers us the opportunity to prove to organisations across Europe that PeopleSoft can offer an ASP system that allows IT managers to be completely aware of the costs of running their IT systems."