Maintenance burden creates innovation squeeze

Up to 80 percent of IT budgets are being used to just "keep the lights on" forcing IT managers to extract more value from current systems if they want any new spend for innovation.

Sydney-based office equipment supplier Corporate Express CIO Garry Whatley said his current goal is to get IT costs down to a minimum.

"Everyone I speak to is focused on a similar issue," Whatley said, adding that as much as 75 percent of his budget is spent on maintenance and support, much of which involves "legacies of the past".

Whatley cited server consolidation and virtualization to reduce management, automation and monitoring of processes to "make us more effective", and helpdesk training and "skilling people up" so issues can be resolved early requiring less second-level support, as ways to reduce the maintenance bills.

"There is a high management level on servers and simple things like password resets which we are now automating," he said. "We now spend a lot of time delivering to the business [which] should be a win-win."

Corporate Express has an innovation council which "creates an innovation culture across the whole organization".

Ideally Whatley would like a spending ratio of 50-50 maintenance-to-innovation, but would be pleased if it got to 60-40.

"There are lots of areas for innovation," he said. "RFID would be one, as well as using the Web for more applications. Innovation may also mean better processes, for example we're implementing ITIL."

On recurrent software costs, Whatley said this is less of an issue at the company, because of its preference for open source.

"Today's innovation becomes tomorrow's support and maintenance - it's an endless cycle," he said.

NSW government-owned Australian Technology Park (ATP) IT manager Chris Goh said outsourcing of services like the helpdesk contributed to maintenance being around 60 percent of IT budgets, but better management of SLAs can bring that down "significantly".

"Innovative products and open source has made it a more competitive and better ball game for IT managers," Goh said, adding that he has got ATP's maintenance burden down to a "minimum" of 20 percent.

Goh blames the recurrent costs of software as hitting the TCO hardest for any organization which has more than 50 people.

"As an organization grows in staff that percentage significantly increases," he added.

"Support tools and cheaper hardware have seen better returns - hardware purchases have become longer as new machines offer little more functionality," he said. "Microsoft tried to hide this cost in Software Assurance so it doesn't look like a recurrent cost for businesses, but it really is."

Goh is subject to regular budgetary pressures and believes IT managers can become more innovative by being creative with procurement strategies.

"Most vendors are open for trials and innovation; try to use existing maintenance money to purchase more "intelligent" products."

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