CIOs may loosen purse-strings

A new report has suggested resellers may need to lift their game in a slowly improving market, with 65 percent of Australasian CIOs citing getting better value for money from vendors and service providers as a key general IT challenge.

The Forrester Research report also found that 75 percent of Australasian CIOs surveyed expected to invest in infrastructure technologies within the next 12 months. Forty-one percent claimed they would spend more replacing servers, networks and storage facilities than they did last year.

Analyst Kathryn Dioth interviewed 57 CIOs in Australia and New Zealand on their key IT challenges this year for the report.

“CIOs are optimistic about the size of their IT budgets, but intend to closely manage the return on their investment,” she wrote in a preface to the report. “Top three priorities are extracting more value from infrastructure, leveraging offshore providers and strengthening IT governance.”

Some 75 percent of Australasian CIOs surveyed claimed they would invest in infrastructure technologies this year, 67 percent in package implementations of core processing applications, 65 percent in Internet and e-commerce initiatives and 61 percent in customised business process application development, the report stated.

Fifty-one percent said their businesses would invest in a new standard operating environment, 44 percent planned to buy enterprise-class applications such as ERP or CRM software, 42 percent would invest in system integration or IT consulting and 39 percent would purchase outsourcing services this year, according to the report.

Dioth wrote that most CIOs would focus on rationalising their data centres, but had no plans for virtualisation of storage and servers to lift savings.

However, Australian and New Zealand companies were planning to spend more of their budget on new investments than their US counterparts, she said.

The report said IT and utilities firms in Australasia claimed an expected spend of 42 percent of their budget on new investments, compared to their US counterparts' 19 percent.

Financial services and insurance companies planned to shell out 39 percent of their budget on new investments, compared with US-based offices' 21 percent.

Retail, consumer services and business services verticals planned to spend 24 percent of their budget on new investments, compared with an American spend of 21 percent, the report found.