CIOs Claim Innovation Is Held Back By Budgets And Partner Failings

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Budgets go on keeping lights on while partner development projects often end in failure

Most IT decision makers have been held back from implementing innovative projects that would transform their businesses due to lack of budget or fears that money spent would be wasted if the project failed to deliver benefits.

Two recently published surveys found that, while transforming the business is high on the agenda for senior IT leaders, most think innovation is being stifled by budgetary concerns and CIOs reckoned most outsources projects were unmanageable or a total failure.

Budgetry constraints

A survey of 465 IT decision makers in the UK, France, Germany and South Africa by IP networking vendor Sonus found that 52 percent of respondents thought innovation was being stifled by lack of funds, even though 70 percent of businesses wanted to spend more time on transformation.

The Removing the Barriers to Business Transformation survey found that most IT budgets were being used to “keep the lights on”, with a huge swathe of money devoted to maintaining legacy systems. In the UK, 53 percent of IT budgets are currently reserved for legacy support, compared to only 34 percent being spent on introducing new equipment and applications.

The primary challenge the decision makers faced in driving business transformation was “adapting IT and network infrastructures to support new technologies”.

“It is clear from this report that IT departments are under increasing pressure to balance the desire to embrace new technologies that can transform the business, while continuing to maintain legacy systems,” said Serge Adam, EMEA vice president for Sonus Networks.

“The good news is that this balancing act is possible when the focus is put on technologies that can interoperate with and overlay existing investments, while simultaneously enabling secure multimedia communications that can transform the business.  In this way, IT leaders can play a key role in driving innovation, improving customer service and using technology to create a competitive advantage,” he added.

Another survey, commissioned from analyst firm Vanson Bourne by development tools vendor Borland, a division of Micro Focus, found that almost one in four (23%) testing and development projects failed to deliver on final requirements.

Of the 590 CIOs and IT directors polled in nine countries worldwide, more than half (57%) described some of their outsourced testing and development projects as unmanageable, an embarrassment, a nightmare, or a total failure.  The majority of respondents (55%) cited too many changes to the requirements during the project as the main reason for overruns or failure to deliver the expected results.

Concerning projects with time or service level issues, over half the CIOs (53%) said they felt let down by their partners but, with

  • 81 percent of the respondents saying they were not totally confident in their ability to clearly document and communicate project requirements to outsourcing vendors at the outset, this may not be surprising.

Less than half said they use a dedicated requirements software tool and the majority rely on spreadsheets like Excel and written documents like Word to capture their requirements.

Only 35 percent said their outsourcing partners were definitely contractually obliged to pay for financial damage should service levels not be achieved. Overall, 84 percent of survey respondents claimed outsourced development and testing projects had created problems for their organisation, ranging from delays to customer products (39%), the ability to protect company intellectual property (29%), and reputation (25%), through to impacting on company revenues (12%).

Chris Livesey, Borland vice president, said, “The research highlights that the relatively poor outsourcing results are often caused by a lack of investment in the processes for requirements management and test specification, and this is something we see consistently in the marketplace today.”


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