CIO Jury: Do businesses spend too much on IT?

Companies are spending too much on IT and not putting enough energy towards delivery and business value, according to leading UK IT executives.

Two-thirds of this week's silicon.com CIO Jury of IT users agreed with Nicholas Carr, author of the 2003 Harvard Business Review article 'IT doesn't matter', in his latest claim that organisations should "spend less on IT".

Carr's assertion is companies are over-spending or buying into expensive projects that fail to deliver - and our panel of 12 IT directors largely agreed.

Ted Woodhouse, director of IT strategy at Leeds Teaching Hospitals NHS Trust, said there is too much spend and not enough delivery.

He said: "It seems to me especially true in the central public sector, where there are many areas which could do with a good dose of 'vulnerability reduction' and a bit more emphasis on delivering something rather than spending on something."

Paul Broome, IT director at 192.com, said Carr's claims are in fact just common sense for businesses.

Broome said: "We spend less by using open source and white label servers - hey I'm a guru too. I can't remember my boss saying please buy a more expensive server, or use a more costly development tool."

A lot of unnecessary spend is also driven by the incessant push by hardware and software vendors to upgrade, according to Neil Bath, IT director at Brewin Dolphin Securities. "We are often obliged to upgrade even though there is no business advantage," he said.

Rob Neil, head of ICT and customer services at Ashford Borough Council, said many local authorities are spending too much on IT.

He said: "There are still too many salesmen seeing public sector bodies as a gravy train and too many council CIOs and CTOs unwilling or unable to take the short term hard option of kicking back against the bull and hype. Mind you, if I wasn't such a cynic, I'd now be trumpeting how the government's shared services agenda is going to produce halcyon days of low IT spend for all."

Others disagreed with the notion that companies are spending too much on IT but said it is about smarter spending and better management.

Jeff Roberts, IT director at law firm Norton Rose, said: "Some investments will fair better on their returns than others - just as other forms of investment do - so some projects may not deliver on their promises, while others triumph. It is up to us to ensure most projects/investments are realistic and manageable in their scope and expectations."

Ben Booth, global CTO at pollsters Ipsos, said: "We need to get smarter about how we invest, and avoid the disasters which do happen from time to time. However overall I think we are not investing enough in IT, because most senior management are still not comfortable with technology. As a result investment is either insufficient, or poorly targeted."

John Hemingway, CIO at Sheffield Hallam University, added: "I believe that it is more important that the money that is available is spent wisely and delivers value. This is the key challenge for the CIO rather than worrying about the absolute amount."

Today's CIO Jury was...

Russell Altendorff, IT director, London Business School
Neil Bath, IT director, Brewin Dolphin Securities
Ben Booth, global CTO, Ipsos
Paul Broome, IT director, 192.com
Mark Foulsham, IT director, eSure
John Keeling, director of computer services, John Lewis
Rob Neil, head of ICT and customer services, Ashford Borough Council
Peter Pedersen, CTO, Rank Gaming
Jeff Roberts, IT director, Norton Rose
Ted Woodhouse, director of IT strategy, Leeds Teaching Hospitals NHS Trust
Graham Yellowley, director of technology, Mitsubishi UFJ Securities International
Phil Young, head of IT and operations, Amtrak Express Parcels

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