Monday, August 4, 2008

The money and the mouth

It's been a while since I had a minute - I'm sure you've had those months too. At last I found a good excuse to write, as we migrate to a new mailing list platform and need to test that it works. Please bear with us if we've made a mistake with your subscription. Yes, our new software is open source. And all I'm spending on it is time. So my priority is deploying my sparkling CRM system for as little money as possible. But what are your CIO's software priorities and where are they putting your money?

Product development wins the race for budget and importance
Hot off the press is our software research with Arthur Goldstuck's company World Wide Worx. Perhaps you saw our comments on the cover of iWeek last month. We asked your CIO the questions and the winner is....more money is being thrown at using software to create new products for your company than any other category of software. Product development also ranks as one of the most important categories, alongside a few others. For example, furniture companies are spending more money on software to design new furniture than elsewhere.

Does this really mean we're more innovative?
Arthur reckons it's an indicator that software is not merely a tool. Rather it's adding more value to businesses and is becoming a means to achieve competitive advantage. Yet infrastructure, finance/accounting and operations software together make up more than 40% of the software budget. This tells me that the basics are still chewing up most of the resources.

HR software is important but cheap yet you're planning to spend more on it
I'm always intrigued by contrasts. Only 5% of your software budget is consumed by HR software, yet it is one of the most important categories. Maybe your HR platforms are in place, or annual costs are low? Or maybe you've had the luxury of negotiating down the price because it's a competitive space? HR and knowledge management are the only categories you plan to spend more money on in future, so I guess the HR software vendors have cottoned onto the idea that they could be charging more....or you're putting your money where your mouth is.