Business Spends Too Much on IT

hp_headForget about “Information Technology”, you can just throw that term out the window. The term used today is “Business Technology” and it’s showing up all over leadership boardrooms. Why? Businesses have begun to rethink just how valuable IT is to their business. Sure, there’s modernization, and that’s just to get institutions off legacy systems. It could be technology, applications, infrastructure or whatever. But how much are businesses supposed to spend on IT?

 

Hewlett Packard is leading the way in changing the discussion. Brad Hipps, Senior Manager of Product Marketing at HP Software & Solutions, was in New York recently presenting to financial institutions and larger clients at the W Hotel in early April to present the application life cycle management business case to it’s customers.

 “Breaking down silos, interactive and iterative development that’s business centered and heterogeneous is key to application life cycle management today.” stated Hipps. The case for modernization noted that 65% of modernization will occur for maintenance, management & operations, while 25% will be for upgrades, leaving 10% for innovation.” Hipps also stated that the shift of proving that software is meeting the needs of the business is increasingly shifting from the app dev teams to the operations teams.

“Businesses are going to justify spends by matching and maintaining IT investments to the business needs.” It was also noted that in the financial services industry a Price Waterhouse study indicated that roughly 5% of total revenue is spent on IT in the financial services industry, which happens to be “by far” the largest of any industry.

Are they getting what they pay for? Well, that all depends who you ask. Fact of the matter remains, businesses are going to ask. So you better have your answers ready to justify those projects in real dollars.

T3 Consortium is a firm beliver. While the economic condition forces businesses to evaluate everything, something that takes up a big chunk of revenue has to be considered. “It’s not like all companies have been doing a bad job in the past. It just means that they’re going to have to get even better!” stated Brooks Betz, who represented T3C at the conference. “Concepts like Centers of Excellence and application lifecycle management review is key. HP has the hardware, and the software to help us get the job done.”

What do you think?

To see the entire presentation – Click Here

 

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