Business chiefs wake up to IT as productivity driver

Survey shows CIOs and business leaders in agreement on value of IT

Survey shows CIOs and business leaders in agreement on value of IT

The gap in understanding between IT and the wider business is closing as companies learn the lessons from disappointing IT investments made during the late 1990s and early 2000s, according to a survey published this week.

The survey of 300 business and IT managers in the UK and Ireland found that 84% of business managers and 76% of ITmanagers believe better use of IT has been the key driver in productivity gains over the past three years.

However, there is still room for improvement in the perceived performance of IT. The survey found that both groups believe IT is under-delivering against investments.

The findings of the survey, commissioned by consultancy Acccenture, could be good news for IT directors accused of failing to meet the shifting demands of business units.

"There is a growing alignment emerging from these groups," said Andrew Morlet, head of strategic IT effectiveness at Accenture. "The boom and collapse of IT investment has seen a re-assessment of the relationship from both sides of the house. They recognise they both need to work more closely together."

Companies that are getting the biggest productivity gains from IT investment are eschewing external benchmarking and technical criteria for measuring their performance, added Morlet. Instead they are focusing on the value to the business of IT investment and are also appointing managers to act as a bridge between the IT department and business units.

IT directors group CIO Connect welcomed the findings of the report. "The companies which move towards business sponsorship [of IT projects] are the ones that are successful," said Margaret Smith, chief executive at CIO Connect. "There are no IT projects, only business projects. Even infrastructure is done for the business in the end."

The Corporate IT Forum, whose members comprise many IT directors from FTSE 500 companies, said IT investments made to fix the Y2K bug and during the dotcom boom and Microsoft's licensing shift had damaged the reputation of IT.

"The relationship [between IT and the business] is cyclical and depends on how the business perceives IT costs. Costs are lower at the moment and IT is delivering - IT directors are working hard to see that continues. Not only is IT getting a lot better at demonstrating what it can do, business managers now understand more about what IT can do."

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Three keys to business gains from IT     

Accenture identified three core characteristics of IT departments that deliver productivity gains: 

  • A strong emphasis on IT governance - there is transparency in all investments. They know what they are spending and why.
  • All projects are owned by a steering committee made up of both business and IT leaders, often chaired by a business leader.  
  • The operational model includes a core relationship management role to work between internal businesses and IT teams, as well as external outsourcing or offshore agencies.

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