The Road to Recovery Goes Through IT

Companies look to IT departments to improve their operational efficiency.

Improving operational efficiency is the main objective for corporate IT departments as they seek to get through the recession, according to a survey of more than 300 IT leaders conducted by talent solutions firm Harvey Nash USA. In the poll, 90% of all respondents indicate that their companies are depending on their IT departments to improve competitive advantage through innovation.

At the same time, IT leaders believe they will be asked to do more with less: 33% report working with decreased budgets, and 22% predict further cuts in their outsourcing and offshore budgets for 2009.

"Today's IT leaders are veterans of other, recent economic hardships, including the dot-com crash 10 years ago," says Doug Plotkin, a member of PA Consulting Group's management division. PA sponsored the survey. "IT leaders then, as they are now, were under great pressure to drive efficiency, and to demonstrate innovative approaches to stabilizing and growing their businesses." This group of leaders, he says, will help us put our economy back on solid ground.

Other findings from the survey include:

IT projects have realized success. 23% of respondents say their completed projects achieved excellent results in the last year, meaning their projects met client expectations and were delivered on time and on budget. 66% say they achieved good results, meaning they met user expectations and delivered within 20% of time and budget estimates.

IT leaders need to be meticulous in managing offshoring partnerships. According to the survey, respondents saw a decline of 5% in the outsourcing efforts that met expectations from 2007 to 2008 and a 7% increase in the number of outsourcing failures. This will require the IT department to manage these partnerships even more tightly to achieve value and efficiencies.

IT budgets are in decline. No surprise here: 34% of respondents report a 17% decline in their annual IT budgets over the past year. The median IT budget, according to respondents, is 5% of the company's total revenue.

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