Studies, Surveys, and More

A CA Inc. sponsored survey found a key set of country-specific regulations is escalating the cost of doing business. A Dell Inc. commissioned survey in the Asia Pacific region identified a lack of an integrated IT environment as the top limiting factor in using technology to compete effectively. In other news, an AIIM study on business process management (BPM) determined that nearly half of the survey respondents did not have consistent practices and lack a formal process management strategy.

Focal Points:

• A global survey sponsored by CA found that almost 45 percent of the companies surveyed reported an increase in the time and monetary resources required to ensure compliance with 13 regulations and industry standards found in countries around the world. The survey was of 575 IT directors or above from large and mid-sized enterprises from all geographies. In North America 41 percent of organizations reported the introduction of new regulations as a reason for increasing compliance expenses while in Asia Pacific, where J-SOX was recently enacted, this number was significantly higher at 55 percent. Europe and Central/South America reported 40 percent and 29 percent, respectively. Changes to existing regulations were also viewed as contributing factors in similar percentages. The study also showed most respondents relied on manual processes to achieve compliance, although manual processes and a lack of centralized control are "a recipe for spiraling costs" in an increasingly regulated environment. More than two-thirds of the companies surveyed reported that they maintained information about the status of their IT compliance controls in multiple spreadsheets and often within different organizational units. Of the 13 common standards and regulations evaluated, the study showed that Sarbanes-Oxley Act of 2002 (SOX) had the biggest impact on cost, IT and the overall business. SOX was followed in cost by CLERP-9, an Australian corporate accountability regulation, and in impact on IT organizations by Basel II, a global standard that governs the capital adequacy of international banks.
• A survey of 40 CIOs from leading organizations in the Asia Pacific region identified the need for simplification of IT as a primary challenge in keeping their IT ecosystems agile and competitive. CIOs identified business agility, expanded business requirements, regulatory compliance, assessing and quickly absorbing mergers and acquisitions, and retaining talent as key challenges amidst shrinking IT budgets, according to the Dell sponsored survey. Dell's CIO, Steve Schuckenbrock, stated the survey feedback is consistent with what Dell is hearing directly from customers. He also stated that Dell itself is using next generation hardware and virtualization to make gains in energy efficiency, speed to market, and reliability. Dell has reduced its 20,000 servers to 518 physical servers and 5,000 virtual servers and thereby improved processor utilization by 30 percent, reduced application deployment from 45 days to four, and achieved saving of $29 million.
• An AIIM BPM study involving 354 business users found 48 percent of respondents indicated that their organizations lacked consistent practices and that management of processes is reactive, lacking any formal strategy. Only 3 percent of the respondents felt their organizations had achieved process excellence. Moreover 57 percent of respondents stated they have no specific group or individual responsible for BPM initiatives. Conversely, among those organizations that focused on BPM, AIIM found that 52 percent achieved a positive ROI in three years or less while another 15 percent achieved ROI in five years or less. A full 70 percent of those who reported executing an ROI indicated direct "hard dollar" cost savings as an achieved benefit, according to an AIIM executive.

Experton Group believes business process improvement and technology integration and simplification are the keys to driving the cost of IT down across organizations of all sizes. Since change is a constant, this must be addressed across the entire IT operational environment and must cover the life cycle of applications, information, infrastructure, people, and processes. Although enterprises and vendors have been "addressing" this for decades, progress has been quite slow and uneven, with more of the journey ahead than behind for most organizations. IT executives should be seriously attacking these issues on all dimensions simultaneously, strategically and tactically, as executives can reduce operational costs by up to 50 percent through process improvement, usage of enhanced technologies, cloud computing, or outsourcing.