As we emerge from the recent economic downturn, information technology spending appears to be fairly flat for the foreseeable future.
As INN's Carrie Burns recently
InformationWeek's Rob Preston also
Preston also pointed to a somewhat rosier survey from industry association
There's actually nothing new about flat IT spending and hiring. The reality is that IT spending has remained lean and mean ever since the dot-com bust in the early 2000s, and never fully recovered.
Companies have been keeping a more watchful eye over where IT dollars have been going, and IT departments have been stretched to their limits in terms of workloads. The emphasis over the past decade has been on strategies that can either trim or keep a lid on runaway IT costs, such as employing service-oriented architecture to better leverage and share existing systems and applications, virtualization to reign in server sprawl and, lately, cloud computing to avoid up-front capital expenditures. I've even seen reports of companies opting to employ public social networks, such as
The bottom line is that any and all IT investments need to demonstrate value to the business before they are approved and funded. This is still a challenge for many companies, as the Gartner-PCI study finds that the majority of IT dollars still are devoted to day-to-day maintenance and support. In other words, IT budgets are still funding IT internal operations versus actively supporting business growth and transformation.
This mindset is changing, and there is movement within the insurance industry. I have spoken with carriers that are increasingly linking IT project-finding requests to business needs. In some cases, if there is little or no demonstrable business value, the project is not funded. The new normal that is evolving is that IT no longer receives a blank check, but is expected to play a full role in driving the future growth of the business.
Joe McKendrick is an author, consultant, blogger and frequent INN contributor specializing in information technology. He can be reached at joe@mckendrickresearch.com.
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