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Innovation takes a hit

Innovation takes a hit

Software projects this year will give priority to cost reduction, reports Forrester.

With uncertainty remaining over the global economic recovery, IT organisations expect to be cutting software services and deferring non-critical projects this year, Forrester reports. “Money and manpower have been reallocated to efforts with clear and more immediate returns, and CIOs are becoming — if they’re not already — sticklers for ROI calculations, to justify software projects,” writes Forrester analyst Tim de Gennaro in The CIO’s 2010 Software Outlook.

Forrester interviewed 2165 executive decision makers in late 2009 in North America and Europe about their plans for software spending for 2010.

They responded that cost efficiency will be the top focus for software projects, followed by speed of execution (for software around automated workflow, data capture and analysis), and supporting company growth.

Innovation becomes a lower priority this year. Forrester says in 2008, 69 percent of respondents said using IT to increase innovation was important for 2009. But for this year, the number dropped to 60 percent. While 31 percent said innovation was very important in 2009, just 23 percent said this is the case for 2010.

Just over half of IT organisations also said they will increase their efforts to reduce the application portfolio by identifying waste and duplication. Half of the organisations surveyed will increase their activities towards establishing and increasing ROI justifications for software projects.

Forrester recommends adopting frameworks for software decisions. These include the Total Economic Impact methodology to measure the ROI on investments and the Technology Investment Matrix for managing priorities.

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