commentary If you're running an IT operation in Australia or New Zealand
there is a fair chance you will see a small budget increase and manage to squeeze out some new investment funding this year,
a leading analyst reckons.
From your writer's perspective, it seems the price for IT directors of winning a rise and/or finding funding for new investment -- as opposed to operations and maintenance -- is a solid commitment to clean up the costly, over-complicated and ageing mess much of the IT at Australian organisations has become.
In a report issued this week, research house Forrester said one-third
of businesses surveyed in the two countries expected an increase in IT budgets in 2006, with the average anticipated figure being 5 percent. Only 18 percent
expected a reduction. (The researcher received responses from 128
firms from Australia and New Zealand, with 14 percent of
respondents being the senior-most IT decision-maker at the
Funds allocated to new investments are also expected to rise
substantially over last year to just over one quarter of overall
budgets, with security, disaster recovery, infrastructure
consolidation and application renewal the top priorities,
According to the analyst, companies are turning to the latter two to unlock new investment funding. Eighty-eight percent of respondents nominated hardware rationalisation as key to creating new opportunities, while a majority also ranked as high priorities rationalising application portfolios, retraining IT staff on modern tools and processes and rewriting legacy applications.
The end is in sight for ageing applications in many
businesses -- a point made by several IT directors interviewed by ZDNet Australia over the past few months. Forrester said almost
half of the companies surveyed planned to make major cuts to
legacy maintenance in 2006, while a mere eight percent of
companies planned to spend more.
Organisations known to have
legacy applications in their sights include
Qantas -- which was late last year eyeing the formidable job of
rationalising some 700-odd applications, many of which are
written in antiquated programming languages -- and Telstra, which is conducting an unprecedented cleanout
of its IT systems.
On the hardware rationalisation front, a few commodity specialists are likely to reap a hefty benefit amid a generally flat market, Forrester reckons. Cisco Systems, Dell, Hewlett-Packard and IBM are expected to win out as consolidation and security activity prompts companies to refine their strategies. The National Australia Bank is looking at desktop replacements, while Suncorp is undertaking a comprehensive desktop and server upgrade.
Banks, along with airlines, motor vehicle manufacturers and others, are also grappling with relatively new security models such as
deperimeterisation -- an architecture designed to support
business agility -- while ensuring their systems and information
stay protected on an ongoing basis from the latest barrage of
Business continuity and disaster recovery in the ICT area is
also front-of-mind for businesses, including those relying
increasingly on the Internet as a low-cost channel for the
delivery of their products and services. (Qantas emphasised just
how fundamental the Web had become to its business model this
week by levying a charge of up to AU$75 for changes to bookings
made by telephone. According to reports, the airline conceded the
move was designed to force people to use the Internet to
undertake those transactions).
Overall, for CIOs and IT managers, the year seems to be one of
getting the house in order to free funding to exploit
opportunities offered by innovation in coming years. While the
task is greater and timing longer at some businesses than others, the agenda is
still the same.
What are the IT priorities at your business? Are they in line
with the Forrester views or are they different? E-mail us at
and let us know.
Iain Ferguson is the News Editor of ZDNet
To take your opportunity to vent about what's bugging you in
enterprise technology, visit my and ZDNet Australia's disaster recovery blog, penned by myself and journalist Steven Deare. The blog can be accessed here.