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Tuesday, January 16, 2007

The 2007 IT Spend Pattern

A recent Mckinsey survey pointed to the advent of two trends in information technology that will become increasingly important to CIOs in 2007:
- A migration to service-oriented architectures and
- The introduction of lean-manufacturing principles to data center operations.
An Alinean study of IT spending finds that Across the 37 industries in the study group, innovation investments were up sharply in several segments – a point correlated well by Saugatuck finding that IT spending priorities can shift significantly from year to year.

In its latest study on IT spending, Saugatuck sees a strong pattern emerging from the data . At least eight of the top ten spending priorities for 2007 will result in improved integration and availability of data and/or applications, enabling enterprises to better leverage existing IT and to improve business and IT operations and efficiencies. The research believes that we may be seeing the beginnings of a gradual shift back toward larger and “big bang”-oriented IT investment strategies.

The significance : The 2007 IT spending themes of integration, efficiency and effectiveness suggest a continued user investment focus on project-based IT, and imply a continuation of strict financial controls over IT spending for user firms – and continuation of a tough sales environment for IT vendors. Vendors need to continue to improve margins even as they face smaller opportunities – although, more opportunities are likely to emerge based on the broad range of investment priorities. For 2007, IT executives need to continue to align IT investments to achieve key business goals and initiatives to assure that performance improvements continue. This puts increased responsibility on the IT solution provider to assure that proposed projects are aligned with corporate goals as well.
The dynamism, more than anything else proves that IT Does Matter!!

Image Courtesy :Saugatuck

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Sadagopan's Weblog on Emerging Technologies, Trends,Thoughts, Ideas & Cyberworld
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