IT on cleanup duty

Forrester expects higher budgets and new investment funding for tech departments but what does it really mean?
Written by Iain Ferguson, Contributor
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.
Iain Ferguson, News Editor, ZDNet Australia

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 organisation).

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, Forrester reports.

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 security threats.

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 edit@zdnet.com.au and let us know.

Iain Ferguson is the News Editor of ZDNet Australia.

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.

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