InternetWeek January 20, 1999

http://www.internetwk.com/news0199/news012099-6.htm

Was IT's Mission Impossible In '98?
By PAULA KLEIN

It's now official: the year 1998 was a time of "major change and discontinuity in the workings of IT organizations," according to a just-published report from Meta Group researchers.

Based on a survey of 426 organizations across 21 industries, Meta found IT organizations becoming systems integrators, package implementors and outsourcing managers at a quickening pace. "There is a tremendous shift in focus and resources away from in-house development," said Howard Rubin, Meta's research fellow.

As a result, the traditional focus on software development and maintenance is down by 33 percent since 1997 and all kinds of outsourcing--development, maintenance, networks, help desks, the data center and business processes--is up an average of 42 percent over 1997.

The study also notes these changes:


Nearly 28 percent of IT spending focuses on the Internet, intranets, the network and new hardware. This is close to the 31.4 percent spent on traditional software development and maintenance for 1998, and it dwarfs data center expenditures of 8.5 percent.

The budget brakes appear to be on. While IT spending was up from 5.1 percent of gross revenue in 1996 to 6.9 percent of gross revenue in 1997, the figure rose a mere 0.2 percent of gross revenue for 1998.

More is being demanded from IT professionals. In 1995, the average IT worker supported 38 non-IT staff. Today that ratio is 52 to 1, an increase of 37 percent.
What it all means is that in 1998 IT faced a "Mission Impossible"-like situation, Meta says. Managers were told to "fix the Year 2000 problem while improving quality and increasing business alignment, but to make sure to cut costs and update the IT infrastructure."