CIO priority: IT consolidation

MUMBAI, INDIA: The CIO KLUB initiated the “Enterprise IT investment trends survey 2009” with Ernst & Young as knowledge partners to gauge the IT spending of companies in financial year 2009.

Ernst & Young conducted the survey, where 153 CIOs had participated, while 123 CIOs provided complete responses.

The study provides an insight into strategic investments in new solutions/technologies, investment priorities in upgrades/ new purchases/ maintenance including hardware, licenses, security devices, business applications, operating systems, storage solutions, network devices and bandwidth. It also focuses on IT outsourcing and data center investments.

According to Ernst & Young, partner – Pinakiranjan Mishra, the survey echoes the sector sentiment that this year shall be the year of consolidation and rationalization, while new investment are planned, companies will be more cautious in their spending than ever before and every investment will have to pass through the acid test of “cost-benefit” analysis.

Survey findings about the top five priorities of the CIOs for 2009-10 includes ITcost reduction, information security including physical security, business continuity planning (BCP)/ disaster recovery planning (DRP), implementing advanced enterprise applications such as CRM/BI/DW and IT consolidation.

“About 50 per cent CIOs responded IT cost reduction as top priority followed 41 per cent significance to information, where even the physical security has gained much weight age after some unfavorable events across the nation and world,” said Mishra.

“BCP/DRP was given importance by 38 per cent respondents and about 36 per cent CIOs are looking beyond ERP and looking at CRM/BI/DW as key to help decision making process in the organizations,” he added.

Moreover, about 36 per cent CIOs agreed to IT consolidation among the top five priorities. According to the survey in terms of IT investment, there was 37 per cent rise in capex and about 33 per cent increase in opex.

Further about 64 per cent respondents from BFSI, pharma and healthcare sectors are planning to invest in advance enterprise solutions. And about 97 per cent respondents will have budgets for new IT initiatives this year. This trend indicates that despite the overall slowdown, CIOs will not be averse to investment in new technologies at a reasonable cost, as long as it adds value.

In terms of IT technologies – virtualization, consolidation and green IT ( green data centers) are the top three technologies planned for the fiscal 2009-10.

About outsourcing the survey findings stated that it’s seen more as a reduce costs initiative and CIOs will not be averse to outsourcing. More than 90 per cent CIOs are satisfied with their IT outsourcing partners that means that CIOs see value in outsourcing and will be keen to outsource functions like facilities management, help desks and call centers.

Moreover about 76 per cent respondents were keen on planning investing in network devices and connectivity. However, the survey’s surprising finding was about open source as it failed to catch CIO’s attention. About 44 per cent didn’t showed interest in planning investment in open source.

Overall, the survey stated that the pace of IT investments will be slower, selective investments will continue through 2009-10.