Most (60pc) of CIOs spend more than half their opex budget on ‘maintenance’ and addressing this is going to be a priority in 2012, Oracle-commissioned PwC research suggests.
CIOs will respond with a more strategic use of outsourcing and standardisation, the independent research by PwC into the IT priorities of European Communications Service Providers (CSPs) indicates.
In order to reduce their own management overheads and manage a shortage of specific skills in-house, CIOs will increasingly outsource a number of areas of their business in 2012, including network and fault management, and provisioning and order management.
CIOs believe this move towards standardisation will create greater agility and make many of the partnerships they need to seek with content and media companies easier to switch on or off.
It will also reduce the cost implications of maintaining restrictive legacy systems which can also prove a costly and problematic overhead.
“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 organisation’s desire to invest in improving customer experience to drive retention,” said David Russell, UK Telecommunications Leader, PwC.
“With the squeeze on product pricing, the need to reduce operational costs, the requirement to simplify IT and increased competition, CSPs see improved customer experience as the key differentiator.”
CSPs are at a crossroads, said Dan Ford, vice-president, product marketing, Oracle Communications.
“They face another year of budgetary pressure, at a time when the need for innovation and competitive differentiation has never been greater.
“CSPs need to increase customer retention and improve the provision of content and services, such as media and applications. More CIOs are focused on simplifying and streamlining their core IT operations and focusing on the areas of their IT operation which can drive real efficiency and growth within the business.”