A majority of companies (75.6%) preferred to cut or freeze non-IT spending rather than resorting to cutting IT budget and/or staff. IDC believes the rationale is to keep the necessary IT expertise in-house , ready to act on any opportunities to make a difference to the business. Some 19.1% of organisations had to bite the ...
Since 1993, IDC’s annual Forecast for Management Survey has provided senior IT executives with practical research into the attitudes and intentions for use of IT in enterprises throughout Australia and New Zealand.
The survey presents Australian CIOs with an excellent way to keep in touch with the industry, offering historical data which helps them to benchmark where they are in terms of the percentage of company budget spent on IT, as well as to see if they have the same priorities and pain points as other CIOs. This year’s survey collected responses from around 360 C-level executives in Australia and New Zealand.
On the eve of the release of this year’s Forecast for Management (FFM) report, CIO spoke to Melissa Martin, senior market analyst with IDC Australia and one of the principal authors of the this year’s report. It is the second year that Martin, who specialises in analysing vertical markets, collated the results and also marks the first time she has been able to apply her expertise in the area of verticals to the final report.
Melissa, IDC has been doing the Forecast for Management Survey for over 15 years, and this is your second year working on the research. What, if anything, was different about this year’s survey?
We generally do the survey around February to March every year, but because of the economic crisis everyone’s budgets were awry and no one quite knew what they were doing, so we put off asking questions until March through May. We thought people might have a better handle on how the recession was impacting their particular business by then -- at least from an IT spending perspective -- and I think that came through in the results, too.
Also, because I specialise in vertical industries, this year we sliced and diced the data by the 12 vertical markets that IDC covers and presented the report in that way. That’s a new feature that I think provides more relevance and resonance to the CIOs who read it, because they can see the numbers right down to their industry level instead of just a general ANZ level.
And how about the results? Did this year’s results hold any surprises, especially in light of the global financial crisis?
Generally you see a clear trend and a view of the market that makes total sense. But because of the economic turmoil that’s going on I think everyone’s in a state of flux -- and that came across in the results. There were a lot of odd little things that I looked at and scratched my head and thought hmm. . . this is an interesting year. So I think the biggest surprise is that the results matched the state of flux of the economy.
Let’s talk about the top CIO challenges. What were the principal trends you saw there?
Three main themes emerged this year’s results. First, CIOs are controlling their spending and reducing their costs -- that’s an absolute no-brainer.
The single most surprising result, however, was the increased focus on human capital management. I initially thought that was really weird, because unemployment is high and everyone is scrambling around for a job. But when you think about it, that actually makes a lot of sense. People are keeping the best staff they have and, if business is quiet, they’re retaining and retraining staff so that when the economic wave comes back to the shore with a crash, the company will be ready to go. Companies are also looking at who is unemployed and cherry-picking the top minds out there. What’s more, there’s a big focus on rewarding employees who have stuck with you during the hard times.
The most dramatic fall that we saw in the survey was with maintenance fees. Spending on maintenance fees has gone down in the region of 20-25%.
I think that maintenance spending has taken a significant hit for several reasons -- the global financial crisis, more pressure on IT budgets, etc, so CIOs are looking at what maintenance contracts they can renegotiate at a cheaper rate or even cancel if the technology is reaching the end of its lifecycle. And of course some CIOs are switching to alternative business models such as SaaS, or free Web-based software like Google Apps, or open source software, and bypassing the conventional maintenance fee structure.
Another thing that came out in the survey this year is that hardware and software refreshes are being stretched as long as possible. People are happy to maintain the status quo until they have to get that new software or hardware they can’t live without.
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