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Lean and Hungry Times

A year-end surge in technology spending? Forget it. Ditto for the launch of big, competitive game-changing IT projects. The reality is that as companies move into the second half of 2002, most CIOs are sticking close to the strategic plan. And above all else, the plan calls for cutting costs - then going back and cutting them again
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If Central Queensland University (CQU) wants not only to keep growing but also to maintain its reputation as one of Australia's most progressive and innovative universities, it knows it cannot afford to put a lid on IT spending. According to director Ian Jenkins, there are just too many things that have to be done that cannot be put off. So just out of a two-year project to implement PeopleSoft, the university plans to invest $1 million in streaming video next year and with its budgeting process for 2003 under way faces heavy pressure from within the university to undertake plenty of other IT spending.

It is a stark contrast to the situation at legal firm Phillips Fox and investment and financial adviser IPAC Securities. Phillips Fox is currently weathering a freeze on any IT spending deemed "discretionary", and a keener-than-usual preoccupation with the bottom line means any proposed major expenditure at IPAC is subjected to more intense scrutiny than usual right now. There's a similar attitude at NSW Lotteries, where concern about return on investment is always high and the current default position is certainly not to spend and at Clayton Utz, which has been working hard at reducing operational costs and using some of those savings in expenditure on new business initiatives.

Mineral supplier Comalco - in the early stages of a JD Edwards implementation representing its biggest ever spend on a single IT project - does join CQU in spending big, but then the mining company had reached the point where it had to replace its existing systems and its business is reasonably strong right now.

Indeed in today's tight budgetary climate - where the default position in many organisations is to limit amounts expended on IT and only approve projects with a proven and short ROI, both Jenkins and his cashed-up team, and general manager information systems Comalco, Ian Green, look far more like the exceptions than the rule.

"I think everybody is just worried about bottom lines at the moment," says IPAC Securities IT manager Rob McKeon. "The market is probably over-serviced and it's a very tight environment in Australia. For that reason . . . any major expenditure that comes aboard goes under very close scrutiny."

SIDEBAR: Guaranteed to Shrink

CIOs offer these tips about paring costs:

  • Common processes cut labour costs.

  • Fewer software applications mean lower maintenance costs.

  • Self-service lowers support expenses.

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Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

More about: Banc, Central Queensland University, Central Queensland University, Clayton Utz, Comalco, Creative, Gartner, George Weston foods, HIS Limited, IDC, JD Edwards, KAZ Computer Services, Microsoft, Morgan, Morgan Stanley, Pearson, PeopleSoft, Phillips Fox, Phillips Fox, Rose, Strassmann, Strategic Systems

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