Innovation Is The Key

How will IT meet increasing business expectations, rapid increases in the pace of business and technological change, shrinking technology adoption lifecycles, and a shortage of skills and resources?

According to Gartner and various other analyst reports, most IT budgets are spent just ‘Keeping The Lights On’ (KTLO). More concerning is that backlogs are compounding annually at a rate of between 10% and 20%, and more than 40% of the initial cost of an application is spent year after year to maintain it.

How do IT departments turn into innovation superstars? Considering Gartner’s IT spending forecast stating that enterprise-wide IT spending is close to $4-trillion, one would think that the IT industry – with all its engineering brainpower – would be at the forefront of efficiency and automation.

Money wasted on maintenance is a sad enough story, but there is a second rail of inefficiency – endemic to all industries and geographies – that is even more troubling. It is based entirely on the accumulation of new service or change requests made by business units which IT has a hard time delivering on.

This failure to deliver is due to limitations ranging from a weak budget to a lack of resources and skills. We say ‘weak’ rather than inadequate budget, as in many cases the budget is misplaced. If 80% or more is spent KTLO, then do two things – find a way to change this and prioritise your budget for innovation. Budgets are locked into legacy and the real problem is that enterprises seldom or never retire legacy.

Business units faced with a critical need for new applications, and where an IT department that is unable to respond, business will end up doing one of two things. They will find a way to solve the problem by building their own applications or ‘renting’ cloud-based solutions. These cloud-based solutions do not require IT’s involvement, at least initially.