E-Sourcing Forum » Productivity gains being eroded from IT

Productivity gains being eroded from IT

October 29th, 2008 at 04:56am David Bush - Iasta

I was recently reading through the Financial Times, which was running a special section on digital business. In it were a number of interesting articles about IT procurement and the current state of investments, architecture, homogeny and best practices.

Via a study by PwC partner, Bob Zukis, some conclusions are being drawn to the productivity (or lack) of organizations which has traditionally benefited from heavy IT investments. However, the tide is changing due in large part to the growing complexity of large implemented systems.

As consumption of IT increases, and as technologies change and advance, businesses have been left to cobble together disparate software and hardware systems and tools.

Instead of supporting innovation, the bulk of spending ends up propping up existing systems.

Of course, these findings are describing the endless quagmire that results from a major system implementation with huge customizations needed and multiple modules. Usually, the breadth of these applications has been developed through a combination of acquisitions and changing priorities which fly the banner of a single, unified logo, but in reality are never truly the same.

As one could assume while reading, these are issues that SaaS solutions generally do not have. FT even calls out this as an example of changing philosophies “to significantly reduce the capital wasted in supporting unused software and hardware”. In fact, many vendors in this space are currently repositioning their legacy business models to be more SaaS friendly, or in some cases, shutting down product lines with the intention of being SaaS only.

Some companies will always defer to the added complexity of installed software for sensitive data, such CLM. But in many cases, even this does not warrant the upfront and ongoing expense which is also tied to long delays waiting for the technology to go live.

Another article, right on the front page, stated:

The most common request from IT buyers is for software or hardware that works the first time, followed closely by fewer releases and updates. Both factors can dramatically affect the cost of running an IT system and, he says, rank ahead of both price and features for most CIOs.

See, SaaS.

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