Budget squeeze piles pressure on IT say directors

Over 90 per cent of surveyed UK IT directors feel that they are facing greater demands on their department than last year – despite 52 per cent reporting cuts in their budget.

A survey for SOA software firm Progress Software found that the UK came out highest in both statistics. It was also the country with the lowest likelihood for budget growth over the next five years. Budget cuts have hit fewer companies in The Netherlands (just 25 per cent reporting cuts), Spain (28 per cent), and Sweden (32 per cent). While all countries reported greater demands on IT than in 2007, none match the UK’s 91 per cent.
This could be a "dangerous combination" when businesses are already facing pressure to streamline operations, claims Dennis Allan, VP EMEA, Progress Software. “This is a tough time for IT – which is now being seen as an area where cost can be reduced,” he says. “But IT is also the key to a more efficient business, so cutting costs in this area can turn out to be counter productive unless approached the right way.”

The Progress findings add further evidence that the IT function is feeling the brunt of economic contraction in 2008. Last June research from CIO Connect indicated that IT managers ‘will have to batten down the hatches’ in the coming 12-18 months, as board-level executives demand IT departments focus on driving more value from existing infrastructure.

When asked what would impact most on the role and structure of the IS Department until the end of 2009, respondents to a CIO Connect survey predicted executive demands for increased value (80 per cent), increased focus on business processes and process efficiency (73 per cent), and executive demands for cost containment (71 per cent).

During the same time frame, 59 per cent of respondents expected budgets to shrink with 60 per cent of this group forecasting cuts of 5-10 per cent. Of the optimists, predicting budget rises (41 per cent), some 62 per cent of the group forecast only minimal increases of between 1 per cent and 5 per cent.

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