PwC says recession putting IT projects on hold (IT – 16/07/10)

Many organisations have scrapped or curtailed IT projects in light of the downturn, according to a PricewaterhouseCoopers (PwC) survey of Irish chief information officers (CIOs).

One-third of those asked said planned or initiated projects in their organisation had been cancelled in the past year. Two-thirds also reported a reduction in the scope of other projects. Eighty per cent of respondents said this kind of cost-cutting was their biggest challenge as they tried to maintain service levels and innovate.

“There’s a few different directions that it [IT spend] is going,” said Pat Kelleher, director of PwC consulting. “There’s a cost-reduction focus in IT, but there are quite a lot of companies where it’s not been cut or has actually been increased in the downturn.”

Ninety-five per cent of CIOs also reported that a business case was now required before any significant expense was made in IT. However, a third of organisations did not follow this through to see if the promised benefits were actually realised upon completion.

This lack of proper procedure is an issue, according to Mr Kelleher. However, he said it had improved on years gone by.

“There was a time when people could afford not to know what the IT expense was even for or what it did,” he said. “There is still a deficit but now more people want to see and understand what they’re getting for their investment.”

The survey also showed that most organisations lack a formal policy for the reduction of their IT carbon footprint, with just 21 per cent already having one in place. While there are clear signs of an awareness and understanding of green issues in IT, the survey suggested they are not a priority.

“Green is on the agenda, all CIOs are aware of what can be done and should be done to reduce carbon footprint,” said Mr Kelleher, “but I don’t think there’s going to be any significant investment in that area in IT while there are difficulties elsewhere.”

Mr Kelleher also said simple green initiatives that saved money were sure to have been embraced but longer-term investments were being overlooked for now.

There are positives in the survey, however. For example, 71 per cent of CIOs said IT had been a significant factor in cutting costs.

More than two in five said they were now reporting directly to their CEO while 62 per cent are members of the senior management team. This suggests that IT is now being seen as a more important part of an organisation.

This piece originally appeared in The Irish Times on 16th July 2010.

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