Forecast 2013: Building a better IT budget
PerkinElmer also has a mobility initiative. Later this year, says Lindgren, the company will outfit its sales and service reps with third-party mobile customer analytics applications that will run on company-issued Android devices and employee-owned iPhones. "When they're going to visit a customer, they can pull up revenue and other information on the customer, like what products they've been purchasing and how their business has been changing," he says.
On the cost-cutting side, PerkinElmer is looking toward analytics tools that will give managers better visibility into global spending. In the past year, Lindgren says, the company rolled out a system that enabled managers to study expenditures and cut costs by reducing the number of vendors they use. "They get a better idea of spending patterns, down to the invoice level," Lindgren says. The company also wants to consolidate the private cloud environments of four software companies it acquired last year, moving them all into one center.
Lindgren's goal is to spend less each year on pure maintenance and "keep-the-lights-on" activities and free up dollars to invest in growth areas. Some of this is happening naturally, he says, as commodity prices go down and the company's need to spend on ERP declines as it moves to a standardized platform. "As we achieve cost savings, we can invest in new technologies and offset the budget increases," Lindgren says.
Changes to the Business Case
According to Horne, this is the direction in which IT spending is moving: away from core infrastructure, such as ERP and customer relationship management (CRM) systems, and toward information-driven projects, including customer-facing systems (social media, marketing and Web applications), business intelligence (BI) and analytics, and collaboration. "Even if total spending is fixed, over time, we're seeing it move from enabling processes to enabling knowledge workers," Horne says.
Forrester Research analyst Craig Symons also sees spending heading in that direction; he cites mobile apps, mobile middleware, BI and customer analytics as major investment categories.
Information-driven initiatives usually cost less than their infrastructure-based counterparts, require less up-front commitment and can be completed more quickly, says Horne. With these types of projects in their portfolios, companies can be more agile about their spending plans -- but payback is more difficult to measure, he notes.
"Traditionally, it's 'How much more cheaply can we do this process?' or 'Can we reduce head count?' " he says. "But if you're giving someone better analytical tools or enabling them to collaborate better or work better on the road, the benefits are clear, but they're harder to measure." The business case is often wrapped around making the workforce more productive and able to produce more value through better decisions and more collaboration, he says.
Squeeze and Spend
At Western & Southern, however, Ross is finding the current economic climate to be an easier one in which to make the business case for two multiyear projects that are more process-oriented than information-oriented: an enterprise content management system and a unified communications system, both of which will replace existing systems that have reached end-of-life status. "There's a little bit more openness to embark on these larger projects," Ross says. "I think they could have been justified even in the darkest days of 2008 and 2009, but we would have gone through more hoops."
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