Consultancy giant Accenture has produced a report which may finally convince senior managers as to the importance of creating proactive IT underpinned by a forward-looking support department.
The report entitled “IT Investing for High Performance” makes a mockery of the notion that you can cut IT budgets while still meeting performance targets. In speaking to the IT departments of 300 Fortune 1000 companies, Accenture found that despite average budget increases of nine per cent in the last year, respondents have been hampered in their efforts to close the gap between goals and results.
The problem stems from an insistence by many companies to persevere with outdated legacy systems that quickly rack up maintenance cost, overshadowing the savings made by not buying replacement systems. This approach also misses out on the potential of new systems to generate their own savings and efficiency gains. A similar problem occurs when job cuts designed to reduce costs lead to such a loss in productivity that the savings made by laying people off are quickly erased.
Accenture has hard numbers to support this theory. According to the respondents, 39 per cent of IT personnel time is spent running and fixing applications, leaving just 14 per cent of the allocated working time for new applications and systems. As an example, Accenture points out that just 10 per cent of customer interactions and 20 per cent of employer issues are dealt with on-line, and argues that if more funds could be diverted into improving web capabilities, each interaction could cost a tenth of what it does today. An IT department that juggles the budget as in the above example will not only gain credence, it will also have a strong example to support its claim for more project budget.
To relate the ideas put forward in this report to service management is easy as it harks back to the well-established argument about proactive service cutting costs and allowing more time to be spent on useful projects. The difference here is that the argument put together by Accenture is being aimed at board level which rightly or wrongly will lead to more activity than if the support manager cries about the same subject.
Expect more of this type of talk in the coming months as IT is increasingly examined under the spotlight. But while such an inquisition would normally lead to bad news as the standard boardroom calculation in such circumstances is to cut costs, Accenture is urging companies to take a more measured, detailed look at the issues impacting IT. And take heart from the fact that Accenture, which operates in the rarefied corporate air so alien to most support departments, is championing the same ideas that we have been discussing for years.