On the Recovery Path

Getting
out of Recessionary Blues

Trimming IT budgets, reevaluating investments, and reducing IT staff is
something which all have been hearing for the past two years. IT
companies however now see hope and respite, where both the finance and
IT executives are working together to maximize their RoIs in an scarce
resource environment and are better prepared to get out from
recessionary blues. Be it any vertical –
healthcare, telecom, defense, retail, construction et.al., IT is seen
as an enabler and as a business value proposition that helps manage
both the top line and the bottom line of a company. A joint report by
CFO Research Services and Micro Focus titled 'Road to Recovery'
explains IT's active role in identifying systems and tools that will
help the business achieve its strategic objectives and provides
extensive views of finance executives on IT investments to leverage on
existing business and create a conducive environment for efficiency and
competitive advantage.  



Challenges
Ahead

A key challenge for any CFO of an IT organization is to prepare for an
upturn by implementing IT innovation in a way that transforms into
business efficiency, maximize RoIs, and increase competitive advantage.
Interestingly, the downturn is driving a fruitful relationship between
the CIOs and the CTOs to achieve business goals. But then what are the
plans and decisions that IT organizations are making to recover from
recessionary blues? The fact remains that such organizations are
pursuing an incremental approach of improving IT by modifying systems
rather than introducing new technologies that would generate maximum
efficiency and boost productivity.



System
Modification – Key to Business Profitability

According to the survey, one of the top most priorities in the agenda
of executives was to modify the existing ERP system as well as the IT
shared services center. Approximately 70% respondents believed that
there was a need to modify the existing ERP models and IT shared
services center. Other major priorities in the list include
modification of internal and external cloud computing, CRM systems,
e-Commerce or website initiative. The survey also suggests that 64% of
the respondents were most likely to explicitly consider the time
required to earn a positive return when making IT investment decisions.
However, they also agree that IT investments are often intended to
generate productivity and efficiency gains across the enterprise, and
these returns can be difficult to predict and measure reliably.



Valuing
IT Spending

About 40% of respondents say that their IT budget has decreased
compared with previous year. Interestingly, a striking finding from the
survey was that budgets were more dynamic than headcounts. This could
mean that going forward IT companies in an economic recovery period
might rather like to increase their budgets for IT systems and services
rather than hire and train new employees.



Conclusion

According to the survey, implementing lengthy, costly rewrites and
packaged replacements of core applications are now things of past..
Modernizing existing IT applications is the only mantra in the mindset
of IT organizations.