​1 in 10 NZ IT teams waste over $100K a year on redundant tech

IT departments across New Zealand are spending big on redundant technology.

IT departments across New Zealand, and indeed Australia, are spending big on redundant technology, with one in ten wasting over $100,000 a year on pointless solutions.

Added pressure from the boardroom, poor ROI and outsourcing experiences are also key themes contained in the research from Rackspace, which quizzed a total of 252 IT decision makers across both sides of the Tasman.

Findings showed that one in ten (10 percent) companies wasted over $100,000 a year on redundant IT, 13 percent wasted $50,000 - $99,999, and 25 percent wasted $10,000 - $49,999.

Boardroom pressure, release issues and poor hires

The report also suggests that 43 percent of surveyed IT decisions makers have experienced executive pressure to implement technology, even though they personally believed it was too risky for the business.

On top of this, almost half (45 percent) of medium and 38 percent of large surveyed businesses have released a version of software to the wider business/consumer that has caused issues.

But it’s not just the technology that is under performing.

More than half (54 percent) of all surveyed businesses, and three quarters (77 percent) of medium sized surveyed organisations have employed a member of staff in the IT team, only to realise after the fact, that they were a bad hire.

“In a crowded market where new technologies are released at such a rapid rate, the modern day choice has become less black and white than it was a decade ago,” says Angus Dorney, Director and General Manager, Rackspace A/NZ.

“It can be difficult to forecast if a purchase is going to deliver on its promise to provide your business with sufficient ROI.

“In some cases, this research shows that a lot of technology is purchased and never used.”

Technology not delivering on a promise

Dorney says almost three quarters (73 percent) of survey respondents reported making a poor purchasing decision, with one third (33 percent) purchasing software and 29 percent purchasing hardware, that didn’t deliver what was promised to the business.

Also, 32 percent of respondents are investing in software, and 31 percent investing in hardware, that became irrelevant within the intended lifespan.

In fact, Dorney says poor purchasing decisions are more prevalent than ever with 45 percent of survey respondents believing they were more likely to make a poor technology decision now, than they were ten years ago.

“In our experience, helping to ensure you’re making the right choices when it comes to technology can come down to doing your research, taking the time to do an in-depth comparison of the available offerings and consulting reputable and experienced providers,” Dorney adds.

“If you do the ground work, you’re more likely to have the foundation you need for a swift and seamless implementation, selecting the right technology for your business needs.”

Outsourcing experience

Outsourcing provides an economical solution for many businesses when it comes to running critical technology outside of the team’s capabilities.

However, not all third parties are providing the levels of customer service and output expected by their clients.

More than half (57 percent) of survey respondents have had a negative outsourcing experience from an IT service provider.

The top reasons for re-thinking an outsourcing policy include:

  • The service was badly managed (48 percent)
  • Moving to a different provider (41 percent)
  • The service continually went down (31 percent)
  • There were security concerns (31 percent)

Teams are however learning from these mishaps, using them to shape their purchasing choices in the future with almost nine out of ten (88 percent) of survey respondents reporting having learned important lessons from regretful decisions.

These include:

  • Always have a second opinion (39 percent)
  • Better diligence in researching before implementing (38 percent)
  • Educate employees on the benefits of the technology being implemented (37 percent)

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