How are you spending your IT budget these days?

The stock market is down, housing prices are down, the cost of everything including food and oil is rising, there is a credit crisis, financial institutions are losing billions and going bankrupt, unemployment is rising and we are either in a recession or about to go into one (depending on who you listening to or reading.)

Businesses are responding by laying people off, canceling projects, cutting budgets and restraining expenses. Others may not be experiencing the downturn but are nevertheless being cautious on spending.

With this as a backdrop many people feel that they can’t undertake any new IT projects involving business intelligence, performance management and data warehousing. They think that you need significant investments in order to do these projects and to obtain business value. Also, software vendors, systems integrators and industry analysts seem to always associate these projects with significant investments. “You need to spend money to make money” is the adage.

Although you do have to make an investment to obtain business value from your BI/DW efforts, that investment may not require a huge capital outlay. In fact, you should leverage existing software and hardware infrastructure to avoid large expenses. You also probably don’t want to start a project that management will perceive as big and expensive during these economic times.

So where do you put your limited dollars where they will give you the biggest impact? One of the most fertile areas to invest in is renovating or replacing data shadow systems or spreadmarts. The business originally had valid reasons for creating these data shadow systems but, most likely, management is now irked by the time and expense that goes into their care and feeding. In addition, many business people feel that these systems are prone to error, and as they get bigger they get inflexible.

Too often IT’s reaction to the data shadow systems is a “big bang” project costing a lot of money. However, as I have discussed before, often you can revamp these systems with your staff’s “sweat equity,” business cooperation and maybe a little outside expertise to guide you on how to change your company’s approach to fixing this problem.

The good news about data shadow systems is that by definition they have business value. Otherwise business people would not have created them and maintained them. The bad news is that both business and IT people have to change their perceptions in order to revamp these systems and to get the business value out of them.

During tough economic times like these, it’s important to see data shadow systems for what they are and take advantage of any opportunity to make your IT budget dollars go further.