Businesses show renewed confidence in IT

Quocirca's changing channels Selling pricey IT solutions to enterprises has never been easy. To get sign off on large projects often requires getting board level approval as well as getting all the influencers in the IT department on your side. So any indications that IT departments are getting a bit more power in this process should be welcome news to vendors and resellers alike.

Two Quocirca surveys have shown how much the perception of senior IT managers in UK and Irish enterprises towards information management changed in a one year period. The first survey was conducted in autumn 2005 and the second 12 months later. Both surveys interviewed 250 senior IT managers in organisations with a turnover of €100m or more.

Both UK and Irish respondents agreed that IT managers have regained ground when it comes to defining how IT could be used to help drive business. In short, this means IT departments feel they have more power to sign off their own projects than they did one year ago. What has driven this?

One reason might be that the investment decisions being made in late 2006 with regard to information management were smaller than those being made a year earlier, but it is also reflects an increased confidence by the business in IT. The two are linked.

In 2005, clouds hung over IT departments. The world had been rocked by a number of high profile business scandals and IT departments felt under siege from regulators who laid responsibility for auditing the actions of employees at their door. Not surprisingly, boards brought pressure on IT managers to come up with the goods, but also made available the funds. So, one year later, as some of the disgraced CEOs were disappearing behind bars, why do businesses have more confidence in their IT managers?

There is the concern that this could be complacency. The second round of research was conducted before sentences were handed down to Enron's Jeffrey Skilling (Oct 2006) and CA's Sanjay Kumar (Nov 2006) – both of which put corporate scandals briefly back on the agenda. If this were true, it would mean IT businesses and their IT departments had not paid heed to the regulators. Fortunately, the research showed that this was not the case.

In 2005, well under 40 per cent of organisations interviewed felt they had a comprehensive understanding of their existing data management infrastructure. One year later this has increased to about 70 per cent. Something had changed. Furthermore, those with a comprehensive understanding in 2006 saw little need for further change. In other words, the changes had already been made and there was already an increased confidence in the ability to manage and retrieve information.

On the surface, all this is a mixed blessing for those trying to persuade businesses to invest in IT, at least in the area of information management. On one hand they can point to successes, but on the other hand if major investments have already been made what will be the motivation for new spending?

Well, with the panic about information management subsiding, businesses have been able to move on to other things. In 2005, businesses were far more concerned that external drivers were affecting their ability to exploit new markets, undertake mergers and acquisitions, and go through structural changes. In other words, more businesses are back focused where they should be on growth. And that means new opportunities to sell IT solutions to support that growth. The message for IT vendors and resellers is not to dwell on the doom mongering of yesteryear and move on to a brighter tomorrow – making sure their thinking is aligned with re-empowered IT departments.

Quocirca's report, Another Year on the ILM Journey is free to Reg readers here.

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Bob Tarzey is a service director at Quocirca focused on the route to market for IT products and services in Europe. Quocirca (www.quocirca.com) is a UK based perceptional research and analysis firm with expertise in the European and global IT markets.