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May 19, 2014

The boardroom battle over ‘stretched’ IT budgets

Why IT pros and the business are arguing over short versus long-term investments.

By Joe Curtis

IT and the business are battling over budgets often stretched to the point of inadequacy, according to a snapshot survey of 100 tech professionals.

Nearly two-thirds of respondents said their priority was to invest in long-term infrastructure

But the main focus for the business, cited by 20% of respondents, was more visible and short-term gains such as upgrading Microsoft Office deployments.

The most common items at the top of IT’s wishlist were virtualisation solutions, at 24%, and extra storage, at 18%, but 36% described their IT budgets as either stretched or inadequate.

Another 44% accused the boardroom of lacking technological awareness, making it harder to communicate IT issues, while boardroom interference was cited by 20% as the major obstacle to spending budgets the way IT pros want to.

The research found that there is a "noticeable disconnect" between the CIO and the rest of the boardroom when it comes to IT budgets.

David Howell, European director, at ManageEngine, which commissioned the study, said: "As budgets become more and more stretched this disconnect will have an increasing effect on the wider business. Overlooking an IT department’s priorities, such as back-end improvements, is not only detrimental to the department’s time, but also impacts the efficiency of the business as a whole.

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"The focus on tactical fire-fighting activities, over more strategic long-term actions, exacerbates this problem even further."

But Stewart Smythe, CEO of cloud services provider Adapt, told CBR last week that IT and the business speak two different languages.

He said: "The challenge is how do you translate from one to the other? The business intuitively gets that IT is a massive enabler but it still can’t specifically say where a pound of IT will increase a pound of revenue for the business.

"What the IT director has to do is understand how the performance of an application drives productivity in the business. He’s got to think that through as a business leader."

The news comes after a CA Technologies study that found CIOs are losing control over IT budgets, as the business reallocates two-thirds of IT spend to drive the business.

Martin Ashall, CTO for CA Technologies UK and Ireland, said: "Businesses are a lot more demanding now of IT. They’re asking IT to step up and help innovation more."

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