Baseline's Top 10 Projects in '06

By Baselinemag  |  Posted 2006-03-02 Email Print this article Print

The Baseline Top 10 Projects in 2006 reader survey reveals that the three largest areas of spending on IT projects this year will be on infrastructure: Voice-over-IP, outsourcing and data networking.

For couriers of corporate data, high on the critical-task list this year is making sure the roads are well-paved—and that the delivery trucks are zooming along at peak performance.

The BaselineTop 10 Projects in 2006 survey, which assessed the expected spending of information-technology managers, reveals that the three largest areas of funding, ranked by expected spending, are related to upgrading or otherwise modernizing information-technology infrastructure.

No. 1 on the list: voice-over-Internet Protocol projects (VoIP). Those who identified IP telephony as "critical" to their company said they will spend an average of $11.11 million for the year on such projects. Outsourcing projects were second, with an average budget of $8.22 million, followed by data networking at $5.57 million. Also in the Top 10 are desktop upgrades ($3.21 million) and application performance management ($2.98 million).

Why are infrastructure projects a top priority? Consider the case of Genworth Financial. This year, the $10 billion insurance company will use voice-over-IP selectively to augment its existing telecommunications environment while also cutting costs.

Dan Niedhammer, senior infrastructure engineer at Genworth, is leading a project to extend an existing Avaya phone system over IP networks to two call centers, each with about 50 agents, in Phoenix and Encino, Calif.

The project, Niedhammer estimates, will cost 70% less than it would to install two separate, standalone phone systems with call-routing and voice-mail features. Instead of paying $520,000 for equipment at the two sites, Genworth can extend the existing Avaya phone switch over IP connections to both call centers for $156,000. Niedhammer's team can also centralize management for those sites, instead of requiring local technicians to maintain the voice system.

Genworth, however, has no plans to junk the 2,500 traditional desktop phones at its headquarters in favor of IP-based sets, because the existing ones work perfectly well. "Voice-over-IP is here, and it's a good tool," Niedhammer says. "But we look at it as one choice, and we're using it only where it makes sense."

To be sure, Baseline'sTop 10 Projects aren't all about infrastructure. Business-oriented applications are also well represented, with the other half of the list taken up by customer relationship management, collaboration, supply chain management, business analytics and compliance tracking.

Click here to download a PDF of the print versionof this story, including more details and charts of spending priorities and who's making the spending decisions.

In December, we surveyed 1,440 Baselinereaders, who were a cross-section of information-technology executives and business managers at companies of varying sizes. Two-thirds are information-technology managers, and 43.5% work for companies with more than 1,000 employees. Each respondent was involved in the final approval process for his or her company's information-technology projects in 2006. The Web-based survey was conducted by The Strategy Group, a market research firm in Englewood, Fla.

In the sections that follow, you'll find examples of how information-technology leaders are putting each of the Top 10 Projects into action.

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