Waking up to the role of IT
Organisations are at a crossroads in their approach to IT management, according to Hilary O’Meara, head of systems integration and technology at Accenture. They are caught between cutting costs and embarking on a new phase of investment.
“Last year it was all about saving money, cutting out the discretionary spends,” she said. “Now they are at a point that if they make further cuts it could degrade business performance.
“They have to decide if they are going to invest to save. Any high performance business should be looking to keep IT costs down while investing in their IT capabilities to improve the bottom line.”
The idea of spending money on new IT investments may be a bitter pill for many organisations to swallow, but there are significant savings to be had that can see a return quickly realised.
“Optimise your data centre and you can save 25 to 30 per cent. Moving to voice over IP will also deliver significant savings,” said O’Meara, “but you do have to spend a bit of money first.”
Perhaps the biggest single message from consultancy companies like Accenture is about the importance of aligning business and IT, making them two parts of the same strategy. There is a feeling that, in the last 18months of the recession, many businesses have been waking up to this old idea.
“When they cut their IT spend last year they saw that it impacted on their businesses and discovered they needed IT to improve performance,” said O’Meara. “More and more of our clients are buying our IT strategy services and picking off projects that make savings and advance the business at the same time.”
Other businesses have responded to the downturn by actively pursuing new international markets. “They are radically changing their business models and making themselves leaner in the process. And they need IT to do these things,” she said.
Strategic projects
Suggestions that consultancy companies like Accenture are precisely the kind of luxury that a struggling business can do without are refuted by O’Meara.
“The days have gone of getting a consultant in for a bit of advice, but we were never really in that business,” she said. “Now it’s about strategic projects, with a return on investment at one end and commoditised ITat the other.”
Although Accenture says it can “play in both markets’‘, there is no doubt that the high-value projects – where the services and solutions are not commoditised – is where it wants to be. A case in point is in analytics and business intelligence.
“In the last 12 months we have been having Conversations with organisations that are looking to improve their infrastructure to support better analytics,” she said.
O’Meara had expected this segment of IT to have taken off three or four years ago. It is finally gaining some traction in the middle of a recession.
Unsurprisingly, organisations are more circumspect about their strategic IT investments. In the past, they may have bought software and only used 5 per cent of its functionality. That wouldn’t happen any more, according to O’Meara.
“They are more careful about their investments and it takes longer to make decisions,” she said. “But that’s the right way to go about it. We don’t want be involved in a project where six months down the line they wonder why they are doing it. People are knuckling down and looking more strategically at what they are going to do.”
