Monday, September 20, 2010

Frugalnomics: Business Productivity and Cost Reduction Remains Top Concern for IT Executives

A recent survey of CIOs and IT executives reveals that Frugalnomics, a focus on austerity via business and IT cost savings, remains strong. In a survey of CIOs, CTOs and senior IT executives by the Society for Information Management, 172 U.S. companies cite "business productivity and cost reduction" as their top business concern. The spendthrift focus is the second consecutive year that business productivity and cost reduction has received the top priority by such a wide margin.

“The insights from the study confirm that the economic downturn is continuing to cause a significant shift in IT
priorities,” said Jerry Luftman, former SIM Executive VP and Executive Director of Graduate Information Systems Programs and Distinguished Professor of Information Systems at Stevens Institute of Technology, who has conducted the annual research for the last 10 years. “It is essential to recognize how organizations are leveraging IT during this prolonged economic conundrum, as well as preparing for when the economy will improve.”

For sellers of technology solutions, the Frugalnomics focus means that marketing and sales must address IT executive concerns. To match needs, we recommend that technology vendors:

  1. help customers understand potential cost savings opportunities that they may not be aware of.  Benchmarks and executive assessments can help determine where the organization is spending more than it should, and which practice improvements could drive savings;
  2. clearly demonstrate and quantify how proposed solutions can drive IT cost savings, business cost avoidance and productivity improvements. A focus on value means that every solution must be cost effective, and have an impact on the bottom-line.
Many of the top 10 concerns in the SIM survey remain on the list from previous years but shifted positions,including business agility and speed to market, which jumped from the No. 3 position to No. 2 in 2010. This may be a sign that with an economic recovery underway or in-sight, that IT is gearing up solutions so that businesses can react quickly to new market changes and opportunities. Globalization, a new priority this year, was ranked as the No. 10 concern on the survey, which annually provides important benchmark data in areas including spending, salaries, job scope of IT professionals and technical/business trends. The top four areas, including IT and business alignment – a perennial concern of IT leaders – received extremely high ratings.

The full top 10 list of concerns in SIM’s annual survey is:
  1. Business productivity and cost reduction
  2. Business agility and speed to market
  3. IT and business alignment
  4. IT reliability and efficiency
  5. Business process re-engineering
  6. IT strategic planning
  7. Revenue generating IT innovations
  8. IT cost reduction
  9. Security and privacy
  10. Globalization
The announcement of the results can be found at:
http://www.simnet.org/resource/resmgr/press_releases/2010_it_trend_survey_initial.pdf

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