Time to smarten your IT act?
1 min read
Manufacturers might want to take a leaf out of the European communications services industry, where CIOs apparently intend to strike a better balance between in-house and outsourced IT – as well as making better use of ERP add-ons, such as CRM, and vanilla systems.
Research undertaken by PwC into the IT priorities of that sector reveals that most organisations (60%) currently spend more than half of their opex budget on system maintenance. The study, commissioned by Oracle, suggests that changing this is going to be a major priority for 2012 and that CIOs will respond with more strategic adoption of outsourcing and standardisation.
Looking at some of the detail, it appears that also driving this endeavour are requirements to reduce IT management overheads and combat an immediate shortage of IT skills – both aspects that will resonate with many in manufacturing. And hence the survey's finding that this sector's CIOs will increasingly outsource in 2012, with main targets including network and fault management, and provisioning and order management.
As for the reference to CRM, while entirely understandable in communications services, it is worth noting that no fewer than 88% of CIOs say they plan a system upgrade this year, the goal being to free them up to focus on strategic requirements and revenue drivers – in their case primarily portal and content applications. Yes, there are clear differences between manufacturing and comms, but there are similarities, too.
One more point: this survey also finds that CIOs intend to push through a move away from bespoke applications, which they see as risking heavy budget overruns, requiring greater integration and demanding closer and more intensive management. PwC notes that more than two thirds (67%) of bespoke applications are delivered with a "substantial" budget overrun (74% with some overrun). That compares to more than half (52%) of commercial off-the-shelf (COTS) applications, which are actually delivered under budget.
Interestingly, the Oracle/PwC research suggests that CIOs also believe standardisation (95% plan to increase their inventory of COTS in 2012) will lead indirectly to improved agility – mostly because of their reliance on a changing partner portfolio. And they note that it will also reduce the cost implications of maintaining restrictive legacy systems, which can prove a problematic overhead in any business.
Thinking about it, manufacturing and communications do have some things in common.
