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Study reveals IT spending patterns

Companies that spend the most on IT tend to outsource their technology needs more than those with less IT spending, according to a study by Deloitte and Touche.

    Insurance and finance companies spend more on information technology than health care companies do. And companies that spend the most on IT tend to outsource their technology needs more than those with less IT spending.

    These are some of the conclusions reached in a study conducted by Deloitte and Touche that analyzed the differences between "high-spend" and "low-spend" companies. This is the ninth year the annual study has been conducted.

    The study surveyed CIOs of companies of similar size and industry to learn more about their IT spending habits. The companies were then separated by industry, with the highest quarter and the lowest quarter of IT spenders compared.

    The study also calculated IT operating costs per employee in an attempt to neutralize the impact of the size of the companies involved.

    The discrepancy in spending between the highest and lowest quarters reached 1,000 percent in some cases, said Mary Haigis, spokesman for Deloitte and Touche.

    Haigis also pointed out that companies in health-care related fields traditionally spend less on IT than companies in financial and insurance industries.

    High-spending companies usually list IT needs as one of their top three operations priorities, while lower-spending companies typically treat their IT spending as a business objective to be met rather than getting caught up in a quest for flashier and often redundant technology, the study found.

    According to the study, lower spenders also: focus more on leveraging pre-configured "store-bought" systems instead of custom building; allocate more resources on IT training; and, in a surprising finding, avoid outsourcing their technology needs.

    Outsourcing, generally thought of as an efficient way to save on IT spending, actually eats up more IT dollars than previously thought. In every category studied, high-spend companies routinely spend two to three times as much on outsourcing as low-spend companies do.

    "We saw that the low spenders seemed to get comparable results for the money they spend," Haigis said.

    Additionally, lower-spending companies utilized 24 percent fewer telecommunications technologies and 22 percent fewer software technologies than their higher-spending counterparts. Deloitte and Touche believes that this simplicity has an unexpected positive effect on companies that spend their technology dollars efficiently: Low-spend companies have much lower employee turnover rates.

    "It?s not what you spend," Haigis said. "It?s how you spend it."