Business goals don't match IT goals?

NEW DELHI, INDIA: A recent survey by Vanson Bourne throws out some interesting patterns.

At 38 per cent, the US spends a larger percentage of its IT budget on modernization than Germany (36 percent) or the UK (28 per cent). About 61 per cent of respondents are currently using a mainframe as a core element of their infrastructure. 75 percent of US respondents are operating on the mainframe, as opposed to 67 per cent in Germany and only 46 percent in the UK. Then 52 per cent of respondents had already invested in cloud computing or will do so in the next year, while 29 per cent of organizations saying they had no plans to do so in the future.

The healthcare industry is leading the way in cloud computing, with 24 per cent of respondents having already invested in the cloud. And 64 per cent of respondents, including 71 per cent of US companies, are migrating their core applications to Windows environments, versus 20 per cent migrating to Unix / Linux environments.

The highlight is however that organizations across the financial services, healthcare, retail and public sectors are failing to align their IT and business priorities, according to this survey by market research company Vanson Bourne and sponsored by Micro Focus. The survey polled 250 CIOs and IT professionals at organizations with more than 1,000 employees across the United States, United Kingdom and Germany, and focused on what IT departments in these vertical sectors are doing to support business growth.

When asked what the top business priority was, the majority of respondents in financial services (38 per cent), healthcare (24 per cent) and retail (28 per cent) named innovation with new products/services, while their counterparts in the public sector cited cost-cutting (31 per cent). However, when asked what the top IT priority was, cost reduction ranked highest across the board in all vertical sectors.

Of respondents across the vertical sectors, 32 per cent cited cost reduction as the top priority while only nine per cent cited allocating additional budget for innovation. These results demonstrate a disconnect between what the IT department believes it should be doing, and where their resources are actually being applied.

At the same time an overwhelming majority of the respondents in all sectors - 58 per cent - named application modernization as the best way to achieve their cost-cutting goals. Application modernization beat out other options such as reducing workforce (17 per cent), rip and replace projects (16 per cent), and rewriting applications in a more modern language (10 per cent). In addition to reducing IT costs, application modernization was cited as a leading driver of innovation. 63 per cent of respondents reported that application modernization has enabled them to support innovation and future growth.

"Despite the mainstream message that we're recovering from the global recession, according to this research, IT departments are still laser-focused on cost savings and cost avoidance through applications modernization," said Stuart McGill, Chief Technical Officer, Micro Focus. "CIOs and IT professionals are being asked to do two things at once: cut even more costs and innovate to meet customer demands. They should remember that the savings they make by migrating their mainframe applications to more modern architectures can actually be reinvested into new projects, so they can in fact achieve both aims at the same time."

When asked what benefits they've realized with application modernization, 70 per cent of respondents cited reduced operating costs, 63 per cent cited support for IT systems for future growth, 60 per cent cited increased speed / reaction time and 55 per cent cited an increase in flexibility / agility.