Leaving business units solely responsible for defining IT investment priorities inevitably fails particularly if a project spans multiple units within an organisation. IT spending plans should be developed jointly between business and IT units through the establishment of an in-house project priority scheme, according to Meta Group analyst Wissam Raffoul.
In 2003, he said, 10 per cent of Global 2000 companies will adopt an IT project prioritisation scheme based on portfolio management best practices to quantify the effect of IT investments on business operations.
This will jump to 35 per cent of Global 2000 companies by 2005.
Raffoul said the scheme will be based on weighing IT investment contributions to increasing the company's presence and performance in the market, and the ability of IT to reduce business costs and identify organisational risks.
"This will allow companies to invest in IT initiatives that contribute directly to the bottom line," he said.
NEC business solutions VP David Haynes said investment geared toward cost cutting and quick returns have replaced the high levels of spending of the past.
"But this is not such a bad thing, maybe it should have always been this way. Looking into 2003, CIOs will continue to want to accomplish more with less, but this is far more in tune with reality," he said.
Research into Australia's top 500 companies by East & Partners found the focus on IT purchasing has shifted to competitive advantage and business benefits rather than price.
Principal analyst Paul Dowling said end users want a high level of support, quantifiable ROI and quality advice from their suppliers.
"To not concentrate on pricing sounds naïve, but companies want a much broader value proposition; the customer community in Australia has grown up quickly in a hyper-competitive market and they want to work with the best," he said.