Chief information officers (CIOs) in Russia are typically better prepared than their European neighbors in terms of controlling costs, research by PricewaterhouseCoopers (PwC) shows.
The study found that 43% of Russian CIOs spend more than half their IT budget on maintaining their systems, compared to 60% in Europe, Middle East and Africa (EMEA). Russian chiefs are also more efficient in terms of the number of applications they use to handle customer relationship management (CRM) systems, with 20% of service providers using 15 applications or more, compared to 45% in EMEA.
However, Russian chiefs fall down on outlay for bespoke applications, with 69% reporting significant overspends for the services. A breakdown shows the typical overspend is 15%, while commercial off-the-shelf (COTS) applications saw managers go 11.3% over budget.
On the flip side, COTS applications deliver a similar level (11%) of savings, when spending falls within budget.
The figures are important as PwC’s research reveals 72% of Russian CIOs plan major upgrades or replacements to their CRM equipment in 2012. Nearly 90% plan to increase their use of COTS applications as part of the upgrade, to make it easier to form partnerships with content and media companies.
“Through 2012 we see a dual challenge for CIOs as they come under increasing pressure to reduce both operating costs and capital expenditure, while meeting their organization’s desire to invest in improving customer experience to drive retention,” notes David Russell, UK telecommunications leader at PwC.
“CSPs see improved customer experience as the key differentiator and that means focusing spend and IT resource on effective CRM, not maintenance of bespoke apps,” Russell adds.
PwC conducted the research for software and equipment firm Oracle, quizzing 22 CIOs in Russia and 30 senior staff in ten EMEA countries.
Dan Ford, vice president of product marketing at Oracle, says the research shows Russian bosses are “focused on simplifying and streamlining their core IT operations,” with a view to pumping more funds into growth “rather than keeping the lights on.”