CIOs under the cosh in 2009

Relentless pressure to reduce costs will sort the wheat from the chaff, says Unisys

Phil Muncaster, vnunet.com 23 Jan 2009

Chief information officers (CIOs) and IT service providers will come under increasing pressure to save costs and improve efficiency in 2009, leading to a greater interest in new technologies, according to outsourcing provider Unisys.

Duncan Tait, UK general manager at Unisys, told vnunet.com that concerns about the "availability of cash" have had a huge impact on decision making in outsourcing and IT provision, and that companies are increasingly frustrated with their CIO's inability to strip costs quickly enough.

As a result, enterprises will register growing interest in providers that can offer virtualisation and software-as-a-service, or "platform-as-a-service", technologies.

"CIOs are being asked to take the costs out [almost] over night, but you have to think radically about how you do that," said Tait.

"And on the supply side, this is going to sort the wheat from the chaff. They will need to focus on what they are good at, and change the delivery model to software-as-a-service."

CIOs who are unable to cope with these growing cost pressures, or manage the proliferation of consumer devices in their organisations, may increasingly be circumvented by business process owners, whose influence in determining where and how IT investments are made will grow, according to Tait.

Harry McDermott, chief executive at telecoms consultancy Hudson & Yorke, agreed that short-term cost optimisation pressures are now the number-one issue for clients, ahead of best practice governance, business agility, service level agreements and other factors.

"Even in a five-year partnership deal with a vendor they are still looking for cost optimisation in year one, whereas in the past you could take a more strategic view and look at the business case," he said.

Unisys also predicted a reduction in so-called mega-deals, and a concomitant increase in smaller engagements involving a larger number of usually competing service providers.

This scenario could provide the smart CIO, working with a trusted advisor, with opportunities for a better business outcome, said Tait.

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