The time for IT spending prudence is over and investing in new technology projects is back on the agenda again – at least according to the big analyst houses. Gartner has this week highlighted areas for investment while Meta Group claims the focus has shifted from getting the most out of existing infrastructure to investing in new projects.
We put the claims to our CIO Jury and asked the question: ‘Does your board and CFO accept it is time to start increasing investment in IT again this year?’
Seven said ‘No’ and five said ‘Yes’ but nearly all qualified their vote by saying that budgets are still tight and it would be a poor CFO who decided to start throwing money at new technology again just because that is the latest trend.
“If it’s raising in absolute terms then I think not,” Kevin Lloyd, CTO at Barclays, told us. “What is most likely is continued investment, where corporations have been prudent, to ensure a blend of necessary (to keep the business going), mandatory and income creation/cost reduction strategic investment.”
Pete Smith, director of IT and telecoms at Inmarsat, said a “sensible” board does not respond to seasonal trends or recognise ‘gap years’. “They consider all investments in IT based on a sensible business case. If the return on investment is attractive and the company has the cash, then they will almost certainly support both the financial and resource investment it takes,” he said.
This was a recurring comment by members of the CIO Jury. “Business remains tough and IT is having to fight for, and justify, every pound,” said Frank Coyle, IT director at John Menzies Distribution.
But some CIOs were more optimistic – David Yu, CTO at Betfair.com, said 2004 will be a year of investment for his firm.
“Although we’ve been fortunate and not had a ‘gap year’, we see the next year as a major investment period for our technology in terms of people and capital. This enables us to not only meet the growth of the business but to invest ahead of future demands,” he said.
At British Airways, CIO Paul Coby said investment in technology at the airline is increasing by 13 per cent this year as part of the ‘customer-enabled’ BA strategy, while at the same time IT operational spend is being reduced.
“This three-way strategy of reducing IT operational costs, higher IT operational quality and increasing IT investment is integral to the BA Business Plan and is strongly supported by the CFO and the Board who very clearly understand the importance of IT as an enabler of business transformation,” he said.
David Jemitus, Government Planning Portal head of IT, also pointed out that along with the higher budget come higher expectations on returns and benefits on the end product.
Today’s CIO Jury was…
Jeremy Acklam, IT Director, Virgin Trains
Dr Stuart Brough, Director of IT Services, University of Strathclyde
Nick Clark, Director of IT Services, Tower Hamlets College
Paul Coby, CIO, British Airways
Frank Coyle, IT Director, John Menzies Distribution
David Jemitus, Head of IT, Government Planning Portal
John Keeling, Director of Computer Services, John Lewis Partnership
Kevin Lloyd, CTO, Barclays
Dharmesh Mistry, CTO, edge IPK
Pete Smith, Director of IT and Telecoms, Inmarsat
Sinclair Stockman, CIO, BT
David Yu, CTO, Betfair.com
If you are a CIO, IT director or equivalent at a large or small company in the private or public sector and want to be part of silicon.com’s exclusive CIO Jury pool, or you know an IT chief who should be, then drop us a line at firstname.lastname@example.org