IT investment: still about keeping the lights on
The sums IT departments devote to running systems, rather than investing in new tech, remains stubbornly high.
Inside the Enterprise: Over the last decade, industry analysts have made much of the amount businesses spend on maintaining their IT, rather than investing in new technology.
According to research firms such as Gartner and Forrester, that ratio was typically 80:20 in favour of maintenance spending, around the time of the Millennium.
In some businesses, the ratio had shifted slightly to 70 or 65 per cent on maintenance by the time of the financial crisis. But, as companies cut back on all spending, in the face of the economic downturn, the ratio slipped back.
Creating new IT capabilities, and keeping existing systems running, is a hard balance to achieve. CIOs are often measured on uptime, rather than innovation. A system failure can mean the sack, not to mention dissatisfied customers and lost revenues.
In any case, the proportion of budgets spent on keeping the lights on, against that available for new technology and investment, remains a long way from the 50:50 split analysts suggest reflects best practice. Only a very few, highly innovative firms, many of them start-ups, come anywhere close to that.
There is an old techie joke, that goes along these lines.
The chief executive asks the IT department why the new system is late, once again. "Surely you can do this on time? The Lord created the world in six days, after all," complains the board.
"But He didn't have an installed base," grumbles the CIO.
Like most humour, this contains more than a grain of truth. Creating new IT capabilities, and keeping existing systems running, is a hard balance to achieve. CIOs are often measured on uptime, rather than innovation. A system failure can mean the sack, not to mention dissatisfied customers and lost revenues. A degree of conservatism, among IT professionals, is understandable.
Unfortunately, this does not always play well with the business.
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