esp technology report
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page 1 [email protected] 01635 550449
In this issue...
VIEWPOINTS FROM VANSON BOURNE’S QNA RESEARCH COMMUNITY
In this issue...
The State of the IT Nation
Here are the findings of Vanson Bourne’s first ESP - technology survey. From now on we’ll be surveying senior decision makers in IT and in Business regularly with the aim of giving vendors of all kinds an insight into the concerns and priorities of your target markets. The topic for the first survey was obvious - how the economic situation has affected IT activity. And it is not all gloom and doom. Certainly budgets and staffing levels are lower, but there is also a new realism about IT project priorities and how, why and when to assess the value they deliver to the business.
“Project priorities and scope are remaining the same so far but looking for greater discount/value from suppliers”
Enterprise Manufacturing Company —Packaging
Topics covered in this issue: 1. Budgets 2. Staffing levels 3. Scrutiny
The content on the following pages derives from our survey of 300 Senior IT decision makers in UK Enterprise (1000+ employees) and Mid-market (250-999 employees) businesses. The sample was drawn from Vanson Bourne’s QNA online research community and the research took place in May 2009.
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“As budgets are reduced it generally becomes necessary to manage by re-prioritising, which necessarily involves revisiting business cases and reducing time to market.”
Enterprise Telecommunications Company
• Over half our respondents reported that their current IT budget is smaller than last year, with an average decrease of 19%.
• Less than a fifth of respondents are enjoying budget increases. • Within this tiny minority, Enterprise businesses saw budget growth of
31% on average, twice the level of smaller companies we surveyed. • The worst-hit sector was manufacturing, where 2 in 3 respondents
reported an IT budget cut.
Respondents with static/lower budgets told us what was happening as a result. This chart categorises their responses to reveal the principal issues. • A third told us that the number of projects has been reduced and a
quarter said they have cut back to essential projects only. • Refreshingly, 1 in 4 said there was no negative effect.
What do your current year's IT budgets look like?
0 %
10 %
20 %
30 %
40 %
50 %
60 %
70 %
Total Financial services Manufacturing Retail, distribution or transport
Other commercial
Mid‐market Enterprise
Smaller than last year Same as last year Larger than last year
0%
5%
10%
15%
20%
25%
30%
35%
40%
Reduction in projects
Essential projects only/ prioritisation
No effect Cost saving Delay in deployment
Quick ROI Reduced head count
How is this reduction/freeze in budget affecting things?
“[Current budgets] cause a strain on projects and less-than-urgent changes. They also focus the minds of users and the business on what is really necessary.”
Enterprise Finance Company
“Only necessary investment is being considered this year until the full implication of the global economic slowdown is understood.”
Enterprise Media Company
page 3 [email protected] 01635 550449
What are IT staffing levels like compared to last year?
• 40% of all respondents told us they now had fewer staff. Approaching half the enterprise businesses had experienced this versus around a third of mid-market respondents.
• The worst-hit sector for IT job losses was retail, distribution or
transport, with 50% reporting decreases. The average was a hefty 25% of the IT workforce.
• Surprisingly, perhaps, the most impervious sector was financial
services, where 25% of businesses said the IT department roster had risen over the past year.
If respondents had a decrease in their headcount, we asked them how this was affecting things. • Higher workload coupled with delivery delays were the obvious main
outcomes. • One in six reported “No effect” from a shrinking IT team.
0%
5%
10%
15%
20%
25%
30%
35%
Busier Delays No effe ct Reduction of activities
Reprioritisation Reduced support
Low morale Increased focus on ROI
How is [your staffing level decrease] affecting things?
0 %
10 %
20 %
30 %
40 %
50 %
60 %
Total Financial services Manufacturing Retail, distribution or transport
Other commercial
Mid‐market Enterprise
Same Down Up
“Increased pressure on existing staff and a greater need for contractors”
Enterprise Technology Company
“Fewer IT contractors means more projects having to be completed in house. Detrimental as existing staff don't always have pre-requisite skills.”
Enterprise Retail Company
“Fewer people doing essentially the same work, although virtualisation of servers and consolidation of data processing centres has helped.”
Enterprise Manufacturing Company—Packaging
page 4 [email protected] 01635 550449
Is there more scrutiny of value-add/ROI now than in last 1 or 2 years?
• Two thirds of all respondents said that there is now more scrutiny of ROI than before, not simply at the time of purchase but through the delivery cycle.
• Financial services, where IT budgets have not reduced as much, is
seeing the greatest increase in ROI scrutiny, to ensure value. • The larger the business, the more IT spend is put under the
microscope - in 70% of enterprises versus 60% of the mid-market.
We asked respondents whom reported an increase in scrutiny how this was manifesting itself. • Clearly project approval processes are now more rigorous and this is
resulting in both cancellations and delays in projects getting off the ground.
0%
10%
20%
30%
40%
50%
60%
Changes to approval process
Projects stopped/ delayed
Greater need to prove ROI
More reporting Reprioritisation Busier Fewer proposals
Reduced standard ROI
period
No change
0 %
10 %
20 %
30 %
40 %
50 %
60 %
70 %
80 %
Total Financial services Manufacturing Retail, distribution or transport
Other commercial
Mid‐market Enterprise
Yes No Don't know
How is this increase manifesting itself?
“ROI period has reduced from 3 years to 12 months”
Enterprise Law Firm
“More time consuming and more documentation but improves accountability and delivery. Helps in ensuring clear specifications are delivered”
Enterprise Healthcare Company
“There is a move to change the budget to be for services rather than by desktop supported. Those taking the service will therefore pay for what they use.”
Enterprise Construction Company
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ABOUT QNA ESP newsletters are drawn from surveys of Vanson Bourne’s online research community, QNA. Making sure we can reach the right person in the right organisation at the right time is the key if Vanson Bourne is to deliver meaningful, independent, and cost effective research to our clients. Thanks to QNA we can guarantee fast, efficient, robust research that delivers and won’t break the bank. QNA members are senior decision makers in both technology and business strands, in all sectors, and from Enterprise level organisations down to SME and micro businesses.
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