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Demands on IT have become more intense: Survey
By siliconindia
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Wednesday, 24 November 2010, 13:26 IST |
3 Comments
Bangalore: Complexities in IT is touching high and the demands on IT have become more intense than ever, according to a survey by McKinsey Global Survey on information technology strategy and spending. In its fifth business technology survey by McKinsey, executives say that they want more immediate value from IT and forward-looking strategies from technology leaders that support growth and innovation.
The survey was done among 864 executives, including chief information officers (CIOs), chief technology officers (CTOs), other executives in the IT function, and C-level executives in other functions.
Questions were asked about their organizations' business technology agenda, their adoption of emerging technologies, and the impact of IT on management practices.
The survey shows that while many organizations express basic satisfaction with their own IT departments, IT executives are facing new obstacles as business units are demanding more value from the function.
Coping with competitive demands
In the hands of competitors, IT is both a competitive weapon and a source of disruption. Till now only two technology-enabled issues were posing threat to companies, according executives. These two threats are - rising customer expectations and significant changes in delivery costs. Since companies are considering a return to growth, two more concerns are added to the list - the emergence of new products or services from competitors and competitors' development of new offerings outside their current scope.
According to respondents of the survey, IT is becoming more than a simple cost center in the minds of many executives, which is good news for those managing IT. Compared with earlier surveys, 23 percent, say IT's primary contribution to the corporation is in delivering IT services at the lowest cost, down from 25 percent in 2009 and 33 percent in 2008.
IT leaders are responding with something of a juggling act as they are faced with demands on several fronts. Similar to responses from last year, executives continue to hammer down IT operating costs for 2011. The primary tactic in this battle is reduction of structural costs within IT and across the organization, and executives expect to keep at it in the near future.
The survey showed that in a bid to grow the business and counter technology-based threats, 55 percent of executives indicate that their companies will be increasing new IT investments in 2011. While 18 percent expect an increase of more than 10 percent, a third of respondents expect these investments to increase by 6 percent or more.
Managing the future
Business intelligence and analytics are the two reasons for the change in the way executives make decisions. Two-thirds of respondents say the business processes and decisions within their spheres of influence are becoming more data driven. The other half cite specific functions that are leading the charge, most often marketing and product development.
The results of the survey showed that in recent years, IT executives have also focused more attention on cloud computing. Over 80 percent of IT respondents say their companies are using or experimenting with cloud technology, while 63 percent say their companies are using cloud-based applications.
