The need to innovate will drive the next big
wave of spending on IT, but CIOs must change the way technology is
promoted at board level if it is to deliver value, research
released today by analyst firm Forrester concludes.
A survey of 3,000 IT decision makers by the firm revealed that
30% intend to spend their IT budgets over the next eight years on
developing new applications and programmes, rather than on
maintaining older system.
"
Developing internet-based applications to improve interactions
with customers and suppliers is now key on CIO's agendas," said
David Metcalfe, senior vice-president at Forrester.
"CIOs are under increasing pressure to innovate through new IT
applications, and the opportunity cost of losing ground to
competitors is fuelling this trend."
However, Metcalfe said only a small number of companies
recognise the importance of innovating through the use of IT. These
companies were ones where IT was already central to doing business,
such as information providers and telecom operators.
According to Metcalfe, bricks and mortar companies with
traditional boards still regard IT with indifference or as a cost
centre, and so CIOs need to change the way they represent IT
innovation.
"It is not a given that technology will deliver business
results. For example, IT and its business constituents still have
mismatched expectations for how long changes to IT systems should
take, and the perspective of firms' top executives reflects that
disconnection."
To bridge this, Metcalfe advised CIOs to focus on measuring
whether IT applications are delivering to
business performance metrics, such as profit, revenue,
opportunity cost, or contribution to innovation, rather than on
technology efficiency metrics.
"Business will become so deeply embodied in technology, and the
technology so deeply embedded in the business, that the development
of next generation IT applications needs to be managed with more
savvy than it is today," he said.
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