IT Spending growing - Steady, But Conservative!!! - Alinean

By admin, January 4, 2007 12:44 am

Continuing on the posts on IT Spending, Came across another report by Alinean ( Hat tip Sadagopan) which has a report covering the topic, below are excerpts from the same:

Analysis based on study of over 21,000 companies in 37 different industry segments worldwide.

Executive Summary:

1. Innovation spending is up sharply by 43% since 2003 and will likely continue to grow
2. IT efficiency has increased 10% allowing companies to do more with less
3. Yet, IT projects remain risky, with almost half of all IT projects cancelled prior to completion, or fail to meet schedule, budget or feature requirements, and only 1 in 4 launched successfully and delivering on promised benefits
4. IT spending is up, but when examined in Relation to revenue growth, overall IT spending has lagged for the second year in a row declining to only 3.3% of revenue
5. More stakeholders are involved in each IT decision making it harder to gain approval and consensus
6. IT Executives prioritize proving and improving the value of IT high, but progress is slow in actually addressing slow in actually addressing the issue and quantifying value
7. Frugal remains best as top IT performers under-spend laggards and the average
8. Overall IT spending, even though lagging revenue growth, is driving superior and quantifiable corporate performance in the majority of industries, and has improved 67% from 2003.

Other points:

Our research proves that overall IT spending is growing steadily, but perhaps more conservatively than expected. It is clear that overall spend levels have not kept pace with revenue growth.

innovation investments are up a whopping 43% as a percentage of overall spending

The yield from IT spending, ROIT continues to improve

IT spending increases will be constrained until the risks of a slowdown disappear

IT Vendors being looked at as partners to improve value of IT and deliver the following:

- Lower Total Cost of Ownership (TCO) to drive innovation investments
- Increase business investments vs. infrastructure spending
- Help stakeholders better collaborate and make optimal decisions
- Reduce risks and improve project success
- Help align IT investments with business strategy
- Help prove the value IT delivers to the business

Source: 1

Prashanth Rai

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