1st Dec 2008 09:00
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NEW MICRO FOCUS RESEARCH REVEALS CORPORATE FAILURE TO SAFEGUARD
BUSINESS-CRITICAL CORE IT ASSETS
"Ticking Time Bomb" as Business Fails to Invest in vital IT skills in recessionary markets
Recession reality demands re-focus on 'core' systems - nearly two thirds (60%) of CFOs in Europe and US say skills to modernise core IT assets are the most valuable in a recession
Core IT assets identified as most business-critical but internet-based 'technologies receive bulk of recruitment budget and organizational focus
Less than one in seven (13%) CFOs convinced that skills exist to maintain core IT assets into the future
NEWBURY, England, 1 December, 2008 - Micro Focus® (LSE.MCRO.L), a leading provider of enterprise application management and modernisation solutions, today reveals that global organisations are not devoting enough time, budget and commitment to safeguard the vital skills required to maintain and exploit their most valuable IT assets.
Results of the global study - "Safeguarding the Corporate IT Assets" - by Micro Focus, in conjunction with leading international business school INSEAD, carried out amongst CFOs, CIOs, and HR Directors across five countries (France, Germany, Italy, UK and US) highlight how the vital skill-sets to manage and maintain core IT assets are being marginalised by the world's leading companies. Many of these organisations are focusing on IT skills for newer Web 2.0 technologies at the expense of the crucial skill-sets required to future-proof the core systems that are most business-critical to the successful execution of operations.
"Last year, Micro Focus highlighted that IT was the forgotten corporate asset. The important step now for global organisations is not to be completely entranced by shiny new technologies and ensure they are also recruiting the professionals that will maintain, and develop the lifeblood of their IT - their core systems and information. Failure to safeguard these assets is tantamount to a ticking time bomb for global business. Organisations must quickly adjust their IT investment strategies to deal with recession realities. Everybody knows that Web 2.0 solutions have huge potential to transform all types and sizes of organisations but their development shouldn't be at the expense of protecting and developing the IT assets at the heart of the business." said Stephen Kelly, Micro Focus CEO.
Micro Focus research, carried out in 450 companies with revenues from $100m up to over $1bn, shows that nearly two thirds (60%) of CFOs, CIOs and HR Directors from organisations across the globe stated that core systems and databases as business critical, compared with only just over a third (38%), who felt the same about systems using new technologies. However, despite reinforcing the importance of core IT assets to business success, respondents revealed that it is the newer technologies which are receiving budget when it comes to recruiting skilled IT professionals. Over half of all those polled (56%) confirmed newer, web-based technologies are the skills being recruited for the most today.
Less than one in seven (13%) CFOs are very confident that the knowledge and skills exist within their organisations to maintain core IT assets into the future. Despite this, nearly two thirds (60%) of CFOs surveyed highlight that in a recession, skills to modernise core IT assets are the most valuable, rather than skills to implement new replacement technologies.
"In this tough economic climate, where the spotlight is firmly focused on business fundamentals, it's ironic that global organisations are failing to maintain the skills that are most fundamental to their business - their core IT assets," continued Stephen Kelly, Micro Focus CEO. "If organisations continue to look for skills in the newer technologies, and fail to safeguard their core IT assets, they leave themselves susceptible to potential disaster when those with these latter skills reach retirement."
"Failure to plan for the vital skills required to manage and maintain the systems which have withstood the test of time and still deliver value to the business on a daily basis, could prove to be a fatal error," said Professor Soumitra Dutta, Chair of Business & Technology at INSEAD. "Corporations need to take note of these findings and ensure they are focused on recruiting professionals with the skills to evolve core IT assets, the fundamental technology that makes our day-to-day lives possible."
"We have seen numerous reports of the impending IT skills crisis," said Professor Jim Norton, Senior Policy Adviser, e-Business & e-Government, Institute of Directors, UK. "This research must act as a wake-up call to organisations across the UK, that safeguarding their core IT assets is a priority for all functions of the business if they want to continue to compete on a level playing field with their nearest rivals."
This new extensive research follows an INSEAD/Micro Focus study in October 2007 which revealed less than half of CFOs and CIOs from leading companies ever try to quantify the financial value of their core IT assets. This latest research includes a number of important findings.
"Ticking Time Bomb"
The research identifies a concerning lack of a drive to recruit specialists in technologies which typically form the bulk of core IT assets (e.g. COBOL, PL1, CICs). Less than a third of CIOs (29%) polled believed their organisation was recruiting enough of these professionals, even though they state they recognise the value that these assets bring to their businesses. Only one in six (16%) CIOs have any confidence that the right recruitment strategies for the vital skills and knowledge required to maintain core IT assets are in place.
International Viewpoints
German CFOs are the least appreciative of the business-criticality of systems using newer technologies, whereas their US counterparts are more easily impressed by the impact these technologies have had on their business. Only 27% of CFOs in Germany say systems using newer Web 2.0 and social networking technologies are very business-critical or the most business critical to the success of business operations, compared with 56% of US respondents, 40% of the UK sample, 31% of Italians and 31% of French Finance Heads.
Harnessing Talent
IT is in most need of recruitment according to most UK HR Directors (67%), yet a tiny number of UK CIOs (13%) hire people with specialist skills and an understanding of IT/ business alignment. The majority hire on the basis of technology skills alone!
This independent research1 surveyed 450 respondents from multiple organisations across France, Germany, Italy, UK and US, comprising 33% CFOs, 33% CIOs and 33% HR Directors. Respondents surveyed were from manufacturing, financial services, and retail sectors, amongst others. Micro Focus also today announces that it will be producing a report to investigate this failure to safeguard business-critical core IT assets. The report will be available in December and include comment by INSEAD business school.
1 Research carried out in partnership with research organisation Vanson Bourne
About Micro Focus
Micro Focus provides innovative software that allows companies to dramatically improve the business value of their enterprise applications. Micro Focus Enterprise Application Modernization and Management software enables customers' business applications to respond rapidly to market changes and embrace modern architectures with reduced cost and risk. For additional information please visit www.microfocus.com.
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Micro Focus is a registered trademark of Micro Focus. All other products and companies mentioned in this announcement are the trademarks of their respective owners.
NOTES TO EDITORS:
KEY DATA
Core systems - the core IT assets are the most business-critical to successful execution of business operations today
60% of CFOs, CIO sand HR Directors from organisations across the globe stated that core systems and databases are either very business critical or the most business critical
CFOs rank core IT assets as the most business-critical by a long margin
On a scale of one to five, where one is the least business-critical and five is the most business critical, core IT assets are ranked at 4.0, compared to 3.1 for additional enterprise systems and additional office systems and 3.0 for new social media technologies
New social networking technologies, and ERP/CRM are receiving more recruitment budget, despite core systems being the most business-critical
Over half of respondents (56%) are allocating budget for new social media technologies skills, making them the most sought after
Skills to modernise core IT assets are more important than skills to implement new replacement technologies in a recession
Finance heads (60%) feel this more strongly than IT (54%)
Only 13% of CFOs are very confident the knowledge and skills exist to maintain core assets within their organisations
'Ticking Time Bomb'
Less than a third of CIOs believe they are recruiting enough core IT assets specialists (29%)
Most IT Heads do not think they are recruiting enough core IT assets skills
47% say they are not and 24% do not know
Only 16% of CIOs have any confidence that the right recruitment strategies for the vital skills and knowledge required to maintain core IT assets are in place
Not one UK CIO is totally confident that IT graduates within their organisation have the skills to safeguard core IT assets into the future
Only 3% have any confidence in this
International Viewpoints
German CFOs are the least appreciative of the business-criticality of systems using newer technologies, whereas their US counterparts are considerably more easily impressed by the impact of these technologies
Only 27% of CFOs in Germany say systems using newer social networking technologies are very business-critical or the most business critical to the success of business operations, compared with 56% of US respondents, 40% of the UK sample, 31% of Italians and 31% of French Finance Heads
Harnessing Talent
CIOs and HR Directors see IT as the biggest priority for investment in people development
Over a third (36%) of HR Directors believe this, alongside half (49%) of CIOs
In the UK 67% of HR Directors believe IT is most in need of recruitment, plus 60% of UK CIOs
Only 23% of CIOs hire people with specialist skills and an understanding of IT/business alignment
40% of CIOs select key IT personnel on technology skills alone!
This figure is 43% in the UK
Just 13% of UK CIOs hire people with specialist skills and an understanding of IT and business alignment
Sample Size
450 respondents across France, Germany, Italy, UK and US - 33% CFOs, 33% CIOs, and 33% HR Directors (not necessarily from the same company)
All companies had revenues of $100m - 61% turnover $1bn+
Sector breakdown
14% Manufacturing
14% Financial services
10% Retail
10% Distribution & Wholesale
11% Utilities & Telecoms
10% Business & Professional Services
10% Travel
21% Other
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