European business confidence is increasing and business leaders are looking towards new ideas and innovation to grow, but these strategies must be supported by more detailed return on investment (ROI) measurements if they are to reach their potential.
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A survey of 80 business leaders in European organisations with annual revenues of over $1bn, carried out by the European Business Awards for IT services firm Infosys, revealed that 68% of those surveyed believed that new ideas and innovation will speed business growth as economic conditions improve.
A total of 86% of business leaders said their company encourages innovation in all areas of business and 73% said their organisations have formal processes for capturing innovative ideas.
But the Shaping Europe’s Future research revealed a shortfall in measuring the ROI associated with these will make it difficult for the business to invest in new technologies to drive innovation. Although 84% said an ROI model is essential all of the time or some of the time, over half admitted they do not have a way to measure and show ROI on innovation.
"Technology and innovation are crucial engines for growth," said BG Srinivas, president at Infosys. "However, for these growth drivers to deliver on their potential, it is important that organisations put in place robust models for accurately measuring the efficacy of innovation. This must include clear visibility on ROI to ensure that as businesses grow they keep a prudent eye on cost control and operational efficiency."
While IT investments support innovation, the research also found that 35% of respondents rated the introduction of new technologies, such as the internet, cloud and social media as critical for growth.
The criticality of IT in growth plans is clear with 63% of respondents citing the IT department as the primary growth enabler for their business. “The most important roles of the IT department are centered around accelerating growth: bringing new ideas to the business, implementing new technologies quickly and effectively, and co-creating in order to launch new products and enter new markets,” said the report.
Confidence is clear. Only 8% of business leaders surveyed cited cost-cutting as the most important role for the technology department.