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.

If CIOs are to convince boards to free up cash for upgrades, they need to convince them that the investment will benefit the business too.

AlixPartners also found that 30 per cent of companies felt IT was a direct driver of profits, according to Rob Hornby, a managing director at the firm and himself, a former CIO. But, he says, that is an improvement on even just five years ago. Boards are, at last, seeing IT as more than just a cost.

However, that all-important ratio between investment and spending remains stubbornly titled towards maintenance. AlixPartners believes it is currently around 70 per cent, in favour of maintenance. "The 50:50 split is still a good aspiration to have," says Hornby.

But, he believes, a longer-term shift towards more investment in new technology will only happen, if companies are willing to spend more now. Putting money into new systems and equipment is one of the few, reliable ways to reduce operating overheads, and free up investment funds.

There is some evidence that this is happening, but companies need cash to fund upgrades, and that cash has been hard to come by over the last few years. And, in that time, the balance of power in IT has shifted too. More money is being spent by the lines of business, not by IT, and innovation may no longer be controlled by the CIO.

If CIOs are to convince boards to free up cash for upgrades, they need to convince them that the investment will benefit the business too.

Stephen Pritchard is contributing editor at IT Pro.

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