Cost cutting takes over innovation for CIOs: Study

When asked what the top business priority was,the majority of respondents in financial services (38 percent),healthcare (24 percent) and retail (28 percent) named innovation with new products/services,while their counterparts in the public sector cited cost-cutting (31 percent). However,when asked what the top IT priority was,cost reduction ranked highest across the board in all vertical sectors.

Of respondents across the vertical sectors,32 percent cited cost reduction as the top priority while only 9 percent cited allocating additional budget for innovation. These results demonstrate a disconnect between what the IT department believes it should be doing,and where their resources are actually being applied.

At the same time an overwhelming majority of the respondents in all sectors – 58 percent – named application modernization as the best way to achieve their cost-cutting goals. Application modernization beat out other options such as reducing workforce (17 percent),rip and replace projects (16 percent),and rewriting applications in a more modern language (10 percent).

In addition to reducing IT costs,application modernization was cited as a leading driver of innovation. 63 percent of respondents reported that application modernization has enabled them to support innovation and future growth.

“Despite the mainstream message that we’re recovering from the global recession,according to this research,IT departments are still laser-focused on cost savings and cost avoidance through applications modernization,” said Stuart McGill,Chief Technical Officer,Micro Focus. “CIOs and IT professionals are being asked to do two things at once: cut even more costs and innovate to meet customer demands. They should remember that the savings they make by migrating their mainframe applications to more modern architectures can actually be reinvested into new projects,so they can in fact achieve both aims at the same time.”