Research suggests cost-cutting exercises rarely pay off

Nearly a third of organisations have reviewed IT processes purely to cut costs

IT departments that focus too much on cost-cutting activities are neglecting other priorities and are generally not achieving the improved profit margins that they are striving towards, according to new research from print giant Canon.

Some 1,800 senior decision-makers across a range of public and private sector organisations were questioned by Canon on how their internal processes have been affected by the economic downturn.

“We wanted to explore the current thought processes of senior decision-makers and the results of the research have been very interesting,” said Canon marketing manager Adam Gillbe.

While 59 per cent of respondents said they had changed their processes to increase efficiency, 30 per cent said they had done so just to cut costs.

Spend on IT and office equipment was found to have decreased or stayed the same in 81 per cent of European organisations.

Many of those questioned said they felt were not fully prepared for what next year might bring because they had been too focused on the present demands of the business.

Most organisations said their current priority is to continue to review processes. However, recent signs of economic recovery have persuaded 37 per cent to consider recruiting more staff and 30 per cent to increase training budgets.

The challenge of remaining competitive during a recession meant that only 14 per cent of organisations are focusing on green IT and only 13 per cent on information security.

However, focusing on cost savings has not benefited most organisations, according to the research. Only 19 per cent of those questioned said they had seen a change in efficiency savings in the past year and 45 per cent said they had seen less than a five per cent saving.