(2006), "The IT productivity trap", International Journal of Productivity and Performance Management, Vol. 55 No. 1. https://doi.org/10.1108/ijppm.2006.07955aab.004Download as .RIS
Emerald Group Publishing Limited
Copyright © 2006, Emerald Group Publishing Limited
The IT productivity trap
The practice of cutting spending on information technology frequently backfires, forcing companies and governments to actually increase their IT expenditure on maintenance, repairs and other unproductive practices, according to the results of a global study released by Accenture.
Accenture’s “IT Investing for High Performance” study surveyed CIOs from more than 300 Fortune 1000 companies and similar-sized organisations.
The study suggests that the universal goal of using IT to achieve more with less remains elusive, as survey respondents cited an inability to close the gap between goals and results, despite average IT spending increases of nine per cent last year.
This paradox stems from what Accenture calls an “austerity trap,” which lures companies and governments into believing that they can freeze, or even cut, IT budgets while maintaining the same level of service.
The trap forces behaviours such as retaining outmoded legacy systems instead of deploying new technologies, leading to higher costs – both in maintenance and lost productivity – in the long-term. What’s more, many companies launch labour-cutting initiatives that also contribute to lost productivity, while failing to achieve the intended savings.