A recent Industry Week article on hard choices for software spending, quotes John Lovelock of Gartner who says that, if you’re an organization, either you’re viewing IT as a way of making money, saving money or increasing your profitability; or you’re viewing it as an expense to be trimmed. The implication, both of the analyst and the author, is that you fall into two camps, the spenders or the savers, and you have to make a hard choice as to what camp you fall in.
Well, I disagree. There are no hard choices when it comes to software spending, only hard heads. Like Procurement, properly approached and managed, IT investments always increases profits (by lowering costs and/or increasing revenue) — especially in the supply chain. Pick an area. Any area. The right systems will always increase efficiency, transparency, and productivity. And if they impact spending, they will help to contain costs and optimize spending, resulting in savings the first time they are used. And anyone who can’t see beyond the up-front costs to the long term savings has a hard head, especially after all of the successful case studies that have been published by the analysts, research firms, and publications over the last ten years.
Unfortunately, it looks like it’s going to be a while before IT spending reaches the level it should be at and companies replace their antiquated systems and/or acquire systems that they should have had years ago, as Gartner is only projecting total worldwide IT spend in the manufacturing sector to grow by 2.6% this year. That means that while one third of CIOs may go forward with software and hardware upgrades that were deferred due to the recession, as per a study conducted by Robert Half Technology earlier this year, it will likely be a while before the other two thirds of CIOs do the same.
As a result, manufacturers will continue to struggle with increasing complexity, global competition, rapidly changing business environments, and volatile raw material prices for no good reason. And the pressure to reduce costs, improve productivity, and deliver greater customer satisfaction while continue unabated. All because they have a hard head.