Tight budgets put more pressure on IT departments

Faced with frozen or declining budgets, IT managers still have to find ways to use technology to help create “performance-driven” companies – and then make sure that they get proper credit for doing so.

That was the main message at a conference held recently by AMR Research Inc. AMR analysts said many companies are spending their IT dollars to address specific business goals, such as getting the right products to customers at the right prices.

Citing a 100-user survey it conducted in October, AMR predicted that the average IT budget will remain the same next year. With that in mind, IT managers must be able to closely wed applications to corporate business processes, said AMR analyst Bob Parker.

In addition, IT staffers must start to actively keep score on company performance and show how they’re helping to improve it in areas such as employee productivity, according to Parker. “A common complaint we get is that IT people don’t get any credit for delivering value,” he said.

Rhonda Hocker, CIO at San Jose, Calif.-based BEA Systems Inc., said the middleware vendor has adopted a general rule that its IT projects should promise a return on investment within one year. BEA is also trying to limit project teams to no more than 12 people and make sure that the work can be completed quickly, she added.

“Nothing must be longer than four months, given the economic climate,” Hocker said. But BEA is moving forward on IT, she added. For example, Hocker said her top priority is creating a set of common services, such as security and single sign-on capabilities, that can be accessed by all of BEA’s internal applications.

The talk about the pressures faced by IT managers rings true for one user not at the conference. “Even though the budgets are the same as last year, we in IT are still given special projects [needed] to run the business,” said Michael Stoeckert, CIO at EPL Inc., a Birmingham, Ala.-based provider of data processing services for credit unions.

EPL is doing total cost of ownership studies in an attempt to find ways to cut IT operating costs, and it’s also using performance and load-testing tools to find and fix bugs in its applications. That has helped the company improve end-user response times and ease software upgrades, Stoeckert said, adding that the resulting savings can be applied to new IT projects.