TechnologyAccounting SoftwareUK ‘wastes £23bn a year on IT’

UK 'wastes £23bn a year on IT'

UK businesses waste £23bn a year on IT that they do not need, according to Gartner Group.

The company says that at least 20 per cent of IT budgets are wasted, and Andy Kyte, Gartner research director warned: ‘The response we get from IT directors is overwhelmingly that 20 per cent is an underestimate.’

The UK spent $160bn on IT last year, according to Gartner.

Typical areas of misspending include over-specified hardware and network infrastructure, unnecessary customisation of software packages, poor control of software licensing, and the failure of ebusiness projects.

‘There’s a common tendency in large organisations to size desktop platforms to the highest common denominator. Because a small number of people need access to fast machines with lots of memory, a lot of companies will, in order to simplify systems management, give everyone the same,’ said Kyte.

‘So most people will only be using five to ten per cent of the power of a machine loaded with software licences they don’t exploit.’

Another area where unnecessary cost had been built up is in customising enterprise resource planning systems.

‘Customisation hasn’t delivered the added business value,’ he said. ‘They should have changed the business processes and many will now do that.

‘In retrospect our research shows that many of the business managers that made the customisation decisions now say they could have got what they needed out of the standard package.’

Ebusinesses also account for unnecessary expenditure. ‘A lot of businesses decided they would try to manage their ebusiness infrastructure in-house. They expected it to generate millions of hits and they needed 24-hour access, so they set up server farms with lots of redundancy,’ said Kyte.

But few sites got the traffic they expected, and ‘they have all that software sitting there and all those disks spinning.’

IT directors are in a bind, according to Kyte. ‘They’ve got to save money from the IT budget, but they also have to deliver change to enable business managers to run lower-cost operations.’

Gartner recommends that companies use this year to rethink their IT investment behaviour. Companies should encourage managers to kill projects that are not delivering business benefits, and prioritise IT investment in line with business goals.

Related Articles

5 key tech innovations helping accountants transform their businesses

Accounting Software 5 key tech innovations helping accountants transform their businesses

3w Heather Darnell, Founder of Ask the BOSS
Finance and the tech foundation: what’s needed to deliver impactful business insights?

Accounting Software Finance and the tech foundation: what’s needed to deliver impactful business insights?

3m Workday | Sponsored
Best accounting software for businesses in the UK

Accounting Software Best accounting software for businesses in the UK

3m Accountancy Age, Reporters
Making sense of enterprise tech concepts for finance teams

Accounting Software Making sense of enterprise tech concepts for finance teams

4m Workday | Sponsored
Open Banking: what you need to know

Accounting Software Open Banking: what you need to know

4m Edward Berks, Xero
Accountancy in the digital age: Flexibility, agility, efficiency

Accounting Software Accountancy in the digital age: Flexibility, agility, efficiency

6m Pegasus Software | Sponsored
Sage purchases Intacct in its largest ever acquisition

Accounting Software Sage purchases Intacct in its largest ever acquisition

10m Alia Shoaib, Reporter
5 tips for SMEs to protect cash flow

Accounting Software 5 tips for SMEs to protect cash flow

10m Alia Shoaib, Reporter