Large firms guilty of reactive IT cost cull

 

Three-quarters of large firms and government departments are stripping out IT cost, with a further 10 per cent planning to do so in the future, Deloitte research shows.

The Deloitte report, entitled How low should you go?, found that reducing third-party spend, outsourcing and sacking contract and permanent staff were the main ways that firms were cutting costs.

The report argues that most organisations are approaching IT cost reduction in the wrong manner, allowing cost reduction targets to be set by those with limited understanding of IT risk.

In addition, the report noted that many firms approach cost stripping in a tactical, reactive way which can lead to delayed projects and force reliance on out-of-date systems.

"IT departments are scrambling to cut costs but are unwittingly storing up problems for the future," said Deloitte partner Neville Howard.

"IT is reacting to business pressure by delivering short-term tactical savings that lack ambition, rather than driving long-term benefit.

Howard added that cutting back too much will leave businesses ill-prepared to take advantage of the upturn in the economy when it happens.

"IT skills are scarce and organisations that have not retained the expertise they need may have real challenges attracting new staff when markets strengthen, particularly if they have a 'hire and fire' reputation," he said.

Copyright ©v3.co.uk


Large firms guilty of reactive IT cost cull
 
 
 
Top Stories
Parliament passes law to let ASIO tap entire internet
Greens effort to limit devices fails.
 
Business-focused Windows 10 brings back the Start menu
Microsoft skips 9 for the "greatest enterprise platform ever".
 
Feeling Shellshocked?
Stay up to date with patching for the Bash bug.
 
 
Sign up to receive iTnews email bulletins
   FOLLOW US...
Latest Comments
Polls
Which is the most prevalent cyber attack method your organisation faces?




   |   View results
Phishing and social engineering
  65%
 
Advanced persistent threats
  5%
 
Unpatched or unsupported software vulnerabilities
  11%
 
Denial of service attacks
  6%
 
Insider threats
  12%
TOTAL VOTES: 1388

Vote