|
Challenging
IT in 2005,
by Jim Wagner
IDC
Research this week published a white
paper that reveals
the trends expected to impact IT spending next year.
The
paper, sponsored by automated software
quality (ASQ) vendor Mercury Interactive
(Quote, Chart) but featuring independent
IDC research conducted throughout the year,
focuses on the three areas many enterprises
will be addressing next year: deploying
and managing complex, critical business
applications; compliance with government
regulations; and outsourcing.
IT
is again becoming the "strategic weapon" it
once was back in the days before the dot-com
bubble burst, the report illustrates, which
caused companies to rein in spending to
focus on cost-cutting.
"Recent
IDC research confirms this shift back to
a more strategic role for IT, but its role
is strategic only to the extent that IT
successfully aligns itself with the priorities
of the business, and delivers applications
that enable new business value," the
paper states. "Overall, business is
looking to IT to ensure the reliability
of business processes, enable the success
of new products and services and help generate
cost savings for the business."
Outsourcing
on the Rise
The
biggest trend will likely be outsourcing,
a topic that weighed heavily in this year's
presidential elections. The most publicized
outsourcing cases have been offshore outsourcing
to Asian countries. IDC surveyed 100 companies
and found 50.3 percent were planning on
outsourcing some of its IT work this year.
The main reason for the shift
in responsibilities is to cut down on costs, but includes
allowing the company to concentrate on their core competencies.
The
duties that most companies will likely
send overseas include legacy application
maintenance (50 percent), Web application
development (47 percent), packaged application
implementation (41 percent) and legacy/custom
application development (41 percent).
According
to Melissa Webster, an IDC analyst and
one of the authors of the report, the challenge
and one of the top concerns for offshore
outsourcing is in the management of the
contracts. Performance metrics, escalation
procedures and change management processes
top the list of concerns for companies
shipping their work overseas.
"Some
of them, of course, touch on communication,
collaboration and visibility of the project
status and completion, because that's where
quality issues frequently arrive," Webster
told internetnews.com. "Those time
zone differences, language barriers, cultural
differences -- all those new obstacles
that you have with geographically separated
development -- need to be managed or else
poor quality can be the result."
While
outsourcing is a big concern going forward,
activities closer to home are going to
have just as much of an impact in the near
future.
Merging
Business Needs with IT Performance
An
IT department's effectiveness is going
to be judged on the contributions it makes
to business operations, according to the
report, even though its budget is not getting
a significant boost.
IDC
asked C-level executives what they expected
from their IT departments. Reliability
(20 percent) and success of new solutions
(17.7 percent) ranked highest in the responses,
with simplicity (9 percent), security (8.6
percent) and better technology than competitors
(6.4 percent) lagging far behind.
In
today's world of Web services , service-oriented
architectures and globally distributed
networks, getting a handle on reliability
can be difficult. This is true especially
when, according to the IDC report, companies
are beginning to emphasize new projects
developed in .NET and Java, while still
maintaining their legacy applications written
in
languages like COBOL.
Roughly
half of those surveyed say they are currently
working on modernizing
their legacy systems. To reduce application failure, IDC
suggests employing better project
management processes and tools to improve IT and business
collaboration; application management; and better processes
and tools for application performance and testing.
Webster
said the merger between the business needs
and IT is going to require strong business
processes be implemented before turning
to software tools to make improvements.
"If
you have weak processes, throwing software
at a weak process gives you
an automated weak process," she said. "But if you
leverage best practices to put good processes in place and
then you enforce and reinforce those through automation,
now not only do you have good processes but a reliable, repeatable
application development lifecycle and application management
structure."
Compliance
Makes Almost Perfect
For
those that already have good practices
in place, software automation tools make
the third concern for IT easier: compliance.
Compliance
with government regulations, such as Sarbanes-Oxley,
HIPAA and SEC 17A-4, has been in full swing.
These
regulations are forcing many organizations
to reevaluate their business practices,
the report states, with companies responsible
for controlling the information contained
within the business and making it transparent.
Compliance
initiatives are IT initiatives, and this
is the one area where companies are willing
to spend a little money, though only 15.3
percent of those surveyed by IDC said they
did as much. Most of the compliance solutions
are coming from new applications (44.1
percent) or enhancing existing ones (27.9
percent) through in-house development.
"If
anything, compliance has shined the light
on the importance of having best practices
and strong processes," Webster said.
|
