IT asked to 'please explain' recent spending

The purse strings have tightened within IT departments, with growing expectations from top-level management for a "payback" on recent spending.

Following a period of rapid implementations of new technologies, many of which did not meet expectations, many IT managers are now feeling the pinch to cut budgets and extract value from their current systems.

Mary Harold, director, information systems for the South Australian Department of Education, Training and Employment, said budgets are restricted and the department needs to get "more bang for the buck".

"We aren't spending more money. We are looking at using our intranet and the Internet to improve productivity for staff. We are also looking at a thin client to reduce our desktop total cost of ownership."

A manager of IT services for a city council, who wished to remain anonymous, agreed that organisations want value for money from the IT department.

"The cost of IT is continuing to escalate and most users are seeking ways to reduce their direct IT costs. Part of our consolidation of infrastructure is to make networks more reliant and cost-effective."

Simon Gatward, sales director of global network services for Unisys Australia, said growth within the managed services area has doubled since Unisys opened its facility 10 months ago, mainly due to company executives telling the IT department to work with what they have and to cut budgets.

"I think the discussion is now focused on return on assets (ROA), rather than return on investment (ROI). If a company needs more money freed up, rather than getting it from the bank, they should look in-house and extract value out of what they have."

Gatward said IT departments were in an "investment holding zone" caused by the economy and the unfulfilled promises of recent technology fads such as e-commerce. "Of late, companies have been piling the money on top and have forgotten to look at the engine to see if it is still working efficiently. If the business is working better, than they get more value out of their systems."

Gatward said that companies need to look at the design of their IT infrastructure to achieve greater value from systems. "Companies have no idea of what they have and need to redesign their systems so that they work better together. When anything new was added [during the recent period of rapid implementations], it was literally just bolted on; this is how bottlenecks in a system occur."

He said many IT departments did not have a proper set of policies and procedures, which has led to the IT business model not being adhered to, resulting in ineffective processes being in place and basic maintenance of infrastructure being dropped.

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