New Research: Pay-As-You-Go IT Services Deliver Real Business Value, Today

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Study of 310 user executives published by Saugatuck Technology and CFO Research Services indicates that "PAYG" IT is delivering real business benefits and accelerating toward the mainstream

Go" (PAYG) IT is delivering real business benefits, and is moving beyond early adoption as it accelerates rapidly toward the mainstream, according to a new research report published today by IT strategy firm Saugatuck Technology and research partner, CFO Research Services.

Termed “On Demand” by some, “Adaptive Enterprise” or Utility Computing by others – all are essentially talking about how IT will increasingly be available for use on an as-needed, as-used basis. Such a capability provides flexibility for businesses to grow and change, and to compete effectively while managing expenditures on more of a "utility" basis.

According to Saugatuck, not only are 73 percent of business, finance and IT executives now familiar with PAYG as a concept, but current users are convinced that PAYG can help reduce costs and complexity, and enable competitive advantage.

“This is the next sea-change in business computing," stated Saugatuck senior program director Mike West, director of the PAYG research program. “While PAYG represents a major shift in the way that IT projects are funded, deployed and managed, the potential benefits go beyond dramatically reducing capital and operating costs. Instead, the promise is one of delivering higher ROI, being more responsive to changing business needs, and accelerating how quickly the business benefits of technology can be realized.”

“At the same time, CFOs and CIOs are all too well aware that planning and process bottlenecks are ubiquitous – and prevent the rapid reallocation of resources as new market opportunities and threats emerge” noted Mary Driscoll, President and Editorial Director of CFO Research Services. “As companies eliminate these constraints, and learn how to turn on a dime, the true potential of PAYG will kick in.”

The findings indicate that nearly 20 percent of companies are already taking advantage of PAYG, with more than 50 percent of executives citing business benefits. At the same time, however, Saugatuck’s analysis reveals that this mini-revolution will take time to unfold – for both the underlying technologies that support its longer-term vision, as well as the business applications and sourcing models that will help make it a reality. Further, it won’t be a panacea for all companies in all situations. Early adopters who have gotten the biggest returns are those that have highly variable infrastructure and application requirements – or who have pockets of internal customer demand that would be prohibitively expensive to fund under normal operating scenarios.

Research Survey and Interviews

This independent research study was conducted from November 2003 through March 2004 by Saugatuck Technology, a business and market strategy consultancy based in Westport, CT. The final report is co- published by Saugatuck and CFO Research Services, the sponsored research arm of CFO Publishing Corp., which produces CFO magazine. Partial funding for the publication of the research was provided by IBM, Employease and Perfect Commerce.

In total, 310 senior business, financial and IT executives participated in the study. More than 30 were interviewed for this report.

To download a copy of the Executive Summary, please go to http://www.cfo-research.com/PAYG.htm. The full research report will go on sale starting April 12, 2004. To order, please contact Shirley Nemchek at (203) 454-3900 or go to Saugatuck’s website at http://www.saugatech.com/paygorder.htm.

About Saugatuck Technology

The company provides research-based consulting services that combines business planning and market assessment with first-hand research of executive technology buyer trends. Founded in 1999, Saugatuck is headquartered in Westport, CT (http://www.saugatech.com (203) 454-3900).

About CFO Research Services Group

Original research and thoughtful analyses are the cornerstones of CFO Research Services Group, the sponsored research arm of CFO magazine. CFO Research Services’ team of research professionals dissects emerging trends in business and financial management using mailed surveys and personal, on-the-record interviews with respected financial executives. Its white papers and research reports often provide a backdrop to conferences produced by CFO Executive Programs and illustrate new applications of technology and breakthrough managerial thinking. For more information, visit http://www.cfo-research.com.

MEDIA CONTACT:

Chris MacGregor, Saugatuck Technology

chris.macgregor@saugatech.com

203 454 3900, x251

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