New research shows its time to invest in IT; or get left behind
Some interesting research just came out from McKinsey in their sixth annual technology survey. The key findings show that businesses are increasingly willing to invest in IT if it results in a more efficient and effective business process.
Business executives continue to ask IT to create more value by enabling business processes with technology, which is driving a significant amount of increased investment.
In our experience, to be succesful you need a well-defined business case that include clear stage gates and metrics for holding business and IT leaders accountable.
By focusing on business processes when evaluating your technology investments is a great step forward. But how succesful are IT providers in fulfilling these requests? As we mentioned in our last post which discussed firms' over reliance on spreadsheets to run their business processes, all too often there is a focus on cutting costs rather than maximising efficiency.
IT Priorities: Is There a Mismatch?
Interestingly, there is a difference in mindset between IT leaders and other executives in terms of their focus on IT priorities. IT leaders cite “reducing IT costs” as their #1 priority, whereas non-IT executives believe the focus should be more on improving the effectiveness and efficiency of business processes, providing better information to managers, and creating new products and services. In fact, IT cost reduction only shows up at #5 on the list of priorities for non-IT executives.
IT Budgets Going Up
Budgets are increasing in 2012, both for operating expenses as well as for new investments:
- Around 58% of companies are citing an increased budget for new investments
- 17% of companies are saying their budget will stay the same
- 17% of companies are reporting a decrease
Boards Need More IT Strategy, Less Cost Focus
There’s also a wake-up call for directors. Both IT and non-IT executives believe the board is too focused on approving or reviewing large IT projects (i.e. managing risk) and not enough on how technology and IT can transform your specific business. This is an important message.
It’s not enough just to avoid mistakes – it’s important to make the right decisions and take action. You can do nothing and make no mistakes, but you’ll miss out on key opportunities and get left behind by your competitors who take advantage of appropriate technology.
Of course, cost is an important element, but cutting corners in terms of business priorities in its name could result in long term harm. If you're interested in taking the first step, it may be worth Signing up for your free IT Healthcheck Assessment so we can assess how best to implement an IT system that increases effectiveness and efficiency for your business.
Your perspective? What’s in store for your organization in 2012? Can you relate to the above findings from McKinsey’s research? How is your business planning to take advantage of relevant software and other technology to improve your performance?