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More from VENCORP International (emphacis provided by me)
Information Technology Budgets
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The percentage of corporate revenue spent on information technology
varies by industry. An overall US average of nearly 3 percent hides
significant differences. Spending ranges from a high of 6 percent or
more in Banking and Telecommunications to a low of 1 percent or less
in the Energy and Retail sectors.
According to a recent Information Week survey of 500 companies and 20
industries, the big spenders on IT are the largest companies. Even
after excluding computer vendors and telecommunications companies, the
IT dollars are impressive. For example, General Motors is spending 4
billion dollars on IT this year, and United Parcel Service (UPS) has a
budget of 1 billion dollars. In between are a number of banks and
insurance companies.
Overall, the surveyed companies have set aside 6 percent of their IT budgets for online activity and nearly 15 percent for outsourcing. A good part of the outsourcing provision is for making application code Year 2000-compliant. Between 31 and 68 percent of the code in these companies is ready for millennium dates. The overall average is 52 percent.
Some companies spend 10 times as much on IT per employee as do their
competitors. The amount spent per employee varies from nearly 15,000
dollars at banks to just over 1,300 dollars in food processing
companies. Overall, US companies spend 6,918 dollars annually on IT
for each employee.
Deloitte & Touche believes that many of the variances found can be
attributed to inefficiency, not need. Wasteful practices exist in all
areas: mainframes; client/server; and year 2000 projects. Four major
patterns leading to waste were identified:
- lack of centralized control
- weak business cases for custom development
- failure to manage IT deployment strategically
- poor human resources management (training, recruitment, job
stress) |
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