Want to keep IT investments from draining the budget and crippling Finance’s procedures? It’s time to scale things back.
It happens to many companies: They start the year off with a list of updates: data networks, a new imaging program, an inventory tracking system, etc. An IT budget and timeline are set, and so begins the endless process of blown cost targets and missed deadlines.
But limiting the number of IT projects a company implements adds up to major savings. Of course, if an IT department doesn’t handle as many upgrades at once, it’ll be able to focus more on the few that it does. What’s the key number to shoot for?
It’s lower than you might think, says new research from the Hackett Group. Companies that zeroed in on processes using between 3% and 7% of IT staff and resources saw faster implementation and greater profits.
In the global study, companies who kept their tech upgrades to this manageable level generated $1 billion more in annual operating profits and $645 million more in net profits, compared with companies in similar industries.
These companies were also twice as likely to meet or beat their cost targets and three times as likely to meet efficiency goals with the reduced IT implementations.