Tech leaders have their eye on specialists who can help streamline their technical operations and leverage systems that can bolster their company's bottom line.

By Sonia R. Lelii
Dice News Staff | May 2008

What's driving IT executives' thinking this year? Cost-savings and efficiency. As they look to hire and retain talent, CIOs and other tech leaders have their eye on specialists who can help streamline their technical operations and leverage systems that can bolster their company's bottom line.

So, business analysts, SAP experts, and specialists in legacy modernization and networking are among the tech experts most sought by major companies, according to a study by researcher International Data Corp. Similarly, business analysts, .Net and Microsoft SharePoint experts, and SAP and Oracle database administrators are positions companies plan to scale up the most aggressively through the end of this year.

They'll seek to fill positions either internally or through outsourcing, says Gard Little, program manager for IDC's Worldwide Services Program/Global Services Markets and Trends. "If they have the staff internally, then they will use internal staff," he says. "But they are open to outsourcing to solve the business problem. It's on the table. In fact, one executive from a $3 billion bank responded: 'That's part of the reason for outsourcing.'"

In February, IDC interviewed 27 CIOs and senior IT executives from companies based in the U.S., with revenues ranging from $1 billion to more than $10 billion, in industries including finance, healthcare and manufacturing.

Executives also were asked to list the IT talent they had difficulty in retaining. Business analysts, SAP expertise, legacy modernization skills (such as in COBOL and CICS) and networking skills were cited. Almost all of the interviewees said their companies are engaged in some form of application modernization, citing a large remaining core of aging applications. Observes Little: "It's not that they can't find these skills. They just have trouble in retaining them."

Economic Woes

U.S. IT organizations are reducing spending for 2008, with more than half of the executives citing the sluggish economy's negative impact on their budgets. About one-half of the remaining interviewees saw a neutral effect to-date, although they foresaw a negative impact down the road. "They have not changed their spending plans, but they're looking at (them) closely and they can change them in a heart beat," says Little.

Nearly 70 percent of the executives indicated tech funding in their companies is becoming more centralized. In the quest for better control and efficiency, more lines of business will have the tech funding process controlled through the CIO's office.

Application installations, such as SAP and PeopleSoft, and data center consolidations as two of the top IT initiatives within their companies.

Bottom Line

The interviews "show a significant shift toward cost reduction rather than revenue generation as a driver for IT investment," says Henry Morris, senior vice president of Software and Services Research at IDC. "Being able to deliver IT services more efficiently, as a response to the economic downturn and to recent mergers and acquisitions, is setting today's IT agenda. Responding to compliance and industry structural changes, such as the popularity of generics in the pharmaceuticals industry, are also key factors in deciding which IT projects get funded and which get deferred."