Independent research by PricewaterhouseCoopers (PwC) into the IT priorities of Communications Service Providers (CSPs) in Russia has found that 43 percent of CIOs currently spend more than half of their operating budget on “maintenance.” That is compared to 60 percent of CIOs in the rest of the Europe, Middle East, and Africa (EMEA) region.
While that suggests Russian CIOs may be managing many of their costs more effectively than some EMEA peers, more than two thirds (69 percent) of Russian CIOs did report significant overspend related to their use of bespoke applications.
The average overspend on bespoke applications was 15 percent, while overspend on commercial-off-the-shelf (COTS) applications was 11.3 percent.
When CIOs spent less than was planned, the average cost-saving on bespoke applications was 3.5 percent compared to 11 percent for COTS applications.
CIOs believe the move toward standardization (87 percent plan to increase their use of COTS in 2012) will create greater agility and make many of the partnerships they will 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 prove an expensive and problematic overhead in a business characterized by the need to bring products and services to market quickly.
Increased use of COTS in 2012 and the associated lower total cost of ownership will allow CIOs in Russia to target more of their budget at growth activities.
Nearly three quarters (72 percent) of CIOs in Russia plan a major upgrade or replacement of customer relationship management (CRM) systems in 2012. This will free them to focus on more strategic requirements and revenue drivers such as portal and content applications.
In EMEA, 45 percent of CSPs used an average of 15 applications or more to handle CRM systems. In Russia, systems are more streamlined, with only 20 percent of CSPs using 15 applications or more.
