Incumbency in IT

One of the fallibilities in US democracy, which is currently a big export item in US foreign affairs(read Afghanistan and Iraq), is the tremendous rigidity of incumbency. For example, the politician currently in power starts off the next election with an 80% probability of being re-elected. Even in so called swing years when a new party “sweeps” to power – the movement is often quite small, less than 20% of seats change. The same phenomenon seems to be true in IT spending.

Optimize magazine in its July 2005 issue (page 48) feature the following:
“Most CIOs spend 60 to 80% of their annual budgets on incumbent vendor maintenance fees, upgrade costs, or multi-year outsourcing contracts according to research from Gartner, Inc. {As well} most companies only spend a fraction of their time renegotiating with incumbent vendors vesus new vendors. [Yet] every IT sector has experienced excess capacity and falling prices. Our research and interviews with companies show there hasnt been an agressive push for improvements [and/or] price reductions.”

Incumbency is the classic symptom in IT of a case of “IT, Heal Thyself”. We have already seen how Forrester Research has uncovered the fact that more nearly 50% of IT shops are not prepared or do not have the basic underlying data to do a TCO-Total Cost of Ownership or effective ROI-Return on Investment analysis. Yet the software and data is available, and much of the data is automatically gathered (or can be readily triggered to be gathered) from existing apps and systems.

Here is a quick laundry list of IT Adminstration providers and some of the systems that can help IT shops get a better bead on their own internal health.

Project Portfolio Management

Primavera Systems
– project and portfolio management tools
Welcom Systems – portfolio of projects software and tools
Projects@Work – resource website for project managers

IT TCO and ROI methods

(c)JBSurveyer 2005

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