67% of bespoke apps are delivered with ‘substantial’ budget overrun
Communications Service Providers (CSPs) have an opportunity to improve IT efficiency, with many CSPs already planning important steps within the next 18 months to deliver the agility their businesses need to thrive in a competitive industry, according to a new report by Oracle.
The report based on research conducted by PwC who interviewed CIOs or C-level executives from 30 European CSPs highlighted that the core of improved business agility is the use of fewer bespoke apps which carry a higher total cost of ownership and bring considerable budget overruns, management overhead and time delays.
In terms of aligning IT with the business priorities, CIOs said improving customer experience is the top driver for IT strategy in the communications industry. And to do the same, a smarter use of customer relationship management (CRM) apps is a focus for system replacement or upgrade.
In addition, portals and improved content are a greater focus for CSPs looking to service and monetise a consumer hunger for rich media and social networking on mobile devices. However, risk, lack of budget and complexity of existing systems are the barriers to effective IT strategy implementation.
The research revealed that CIOs are planning a move towards standardised, off-the-shelf apps as well as a strategic use of outsourcing to simplify their in-house IT, bridge existing skills divides, reduce operating costs, mitigate risk and improve business efficiency.
The report revealed that 67% of bespoke apps are delivered with a ‘substantial’ budget overrun (74% have some level of budget overrun) 52% of commercial-off-the-shelf applications (COTS) are delivered under budget.
60% of CIOs currently spend more than half of their opex budget on ‘maintenance’; 95% of CIOs believe they will increase their use of COTS over the next 18 months; 40% said IT refresh or upgrade is also in the top three while 36% cited reducing operating expenditure.
Oracle communications product marketing vice-president Dan Ford said CSPs have a real window of opportunity right now to grow revenue through improved customer service and new content offerings.
"That must be where they focus their attention and their budgets. But first, they must stop over-investing in bespoke applications and migrate their operations to industry-standards based, off-the-shelf applications," Ford said.