British businesses must try harder to cut their existing IT overheads and channel the savings into new systems that could make their businesses more agile, HP's UK managing director has said.

Steve Gill told Computerworld UK that many IT departments in medium to large organisations were spending an "astonishing" 80% of their IT cost base running their existing portfolio of applications and hardware.

He said HP itself was increasingly advising its clients about how best to make this switch.

"A lot of our large enterprise customers look like us, with different offices around the world and a large infrastructure, and they are asking us how to change their balance of spending on IT."

"In our company we are getting towards spending 30% on existing operations and 70% running new applications that create new business opportunities and make us more reactive," he said. "It is an achievable number for anyone."

Gill said it was "very difficult" for businesses to react quickly to a changing environment and to competitors' actions if they did not have the ability to spend in the right areas. He said it was one of the key challenges that IT chiefs and chief executives faced today.

HP's services business forms part of its technology solutions group, which expanded dramatically last year when it bought Mercury for $4.5 billion (£2.21bn).

The services business generated approximately $7bn in the UK, its largest division outside the US, out of global revenues of $92bn in the year to 31 October last year. It is also working hard on its green credentials.