News

IT execs ready to spend on BTO

• By Michael W. Bucken
• July 8, 2004

A growing number of corporate IT operations say that business technology optimization (BTO) is an optimal approach to managing organizational IT complexity and inefficiency, according to a survey of 240 CIOs and CTOs from large U.S. enterprises. Analysts said the IT move to BTO is moving more swiftly than expected.

''I was surprised by the swiftness that CIOs are flocking to IT governance as a goal, and the amount they appear to be willing to spend on putting IT governance into effect in their organizations,'' Data Gardner, senior analyst for application infrastructure and software platforms at Boston-based Yankee Group, told ADT .

A majority of respondents believed that between 15% and 20% of corporate applications budgets could be cut using BTO tools and techniques, thus freeing significant resources for new projects and systems. The survey found that a current lack of BTO use for business applications and maintenance is forcing corporate IT operations to spend significant sums on financial and human resources. According to the survey results, respondents agreed that added strategic spending on application management, IT governance and general BTO tools, would decrease total spending on total cost of ownership, or TCO -- opening the opportunity for a new wave of IT investment and a better-run IT environment.

Gardner predicted that growing IT budgets over the next few years will disproportionately favor spending on management, and IT governance products and services. Gardner said Yankee Group believes that over that time, the definition of BTO will be expanded to further improve collaboration between IT and business planners, as well as optimization around integration activities.

The survey results showing strong interest in BTO for the IT executive level bodes well for the future of business technology optimization. Yankee analysts did say that CEO-level executives must also be convinced to pay more attention to the need for BTO tools and technologies.

Gardner said the primary value of  BTO ''is lowering costs and time-to-value for business applications, while creating the means for a virtuous adoption cycle to IT productivity enhancement and investment.'' Thus, BTO can validate future IT and BTO spending on projects to produce business services.