CIOs hamstrung by short-term cost-cutting

Board-level interference, preferred supplier lists and a short-term, cost-cutting approach are hampering innovation in corporate IT departments, according to a survey of European CIOs.

Almost half (47 per cent) of the 250 CIOs said best buying practice is being compromised by inflexible purchasing processes at their organisations.

Reasons cited included preferred supplier lists and a quarterly budgeting approach based on buying hardware, software and services at the lowest possible cost.

Just over 40 per cent of CIOs said they favour existing vendor relationships over other IT suppliers despite almost a quarter (24 per cent) saying they do not believe it is conducive to achieving long-term business objectives.

Almost half admitted that adding a new IT supplier to the preferred list was difficult in existing business environments.

Steve Rawsthorne, European VP of sales and marketing at Unisys, which carried out the research, said too many CIOs are put off trying new and innovative technologies because they are simply focusing on "keeping the lights on" at the lowest cost with the same suppliers they have always used.

He also said that as the sourcing and procurement functions of big global corporations become more centralised and inherit more power over IT buying decisions, they will need to evolve.

"Purchasing is now at a point where they need to move forward as business leaders instead of focusing on just cutting costs," he said.

The survey questioned 250 CIOs in organisations employing over 500 people in the UK, France, Germany, Italy, the Netherlands, Portugal and Spain.