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By Michael Eggebrecht
The road to economic recovery won't be reflected in the near-term IT budgets of North America's biggest banks, according to research firm Aite Group.
In surveying 40 CIOs and IT executives from banks among the 120 largest in the U.S. and five biggest in Canada, Aite found that 72 percent expect their budget to stay the same or shrink in 2010; last year, that number stood at 73 percent.
With spending unlikely to increase, 84 percent of respondents said they plan to focus on improving efficiencies over the next two years, and 66 percent will be looking to cut costs. How will they go about cutting back? Fifty-four percent said they will renegotiate prices with existing providers, while 44 percent will turn to technologies like virtualization. Those approaches were followed by new technology architectures (30 percent) and a reduction in the number of applications (22 percent).
As an indication of how lean IT departments have become, only 11 percent said they will cut staff and 9 percent anticipate bringing more technology in-house.
The survey, which was conducted in July and August, also found an increasing number of stakeholders in IT spending decisions. Among the groups exerting more influence on IT decisions is risk and compliance, said 46 percent of respondents, followed by IT itself (44 percent), the lines of business (39 percent), operations (35 percent) the CEO (28 percent) and finance (28 percent).
"Strikingly, respondents don't hint at anyone really losing ground in the battle for influence over IT decisions, suggesting that organizations are becoming more mature and savvy at making IT decisions," according to the report, which was written by research director Gwenn Bezard. "It also suggests that those decisions are becoming more complex, with a growing web of stakeholders weighing in."
To adapt to the changes, vendors will have to train their sales teams to target not only the business side beyond IT, but also functions like risk and compliance, operations and finance, noted Bezard.
Which technologies are likely to earn a sizable share of precious IT dollars? Fifty-one percent of the IT executives called virtualization "very important" to the future of their firm, and 58 percent are likely to invest in that area of the next 24 months. Of the respondents, 35 percent named business intelligence software as very important, with 28 percent planning projects over the next two years. Twenty-seven percent cited enterprise data as very important, and 26 percent named business process management solutions.
"Despite the buzz," says the report, "only 9 percent of respondents judge cloud computing to be very important to their future success."
Seventy-three percent of the survey participants anticipate buying server hardware over the coming two years, with 47 percent planning to buy storage systems and 44 percent looking to invest in network infrastructure. Only 16 percent plan to upgrade their client operating system to Windows 7 in the next 24 months.
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