IT is increasing efficiency but failing to drive business growth

By Thor Olavsrud , CIO |  IT Management

"In the networking space, we see the challenges identified in this research most pronounced," he adds. "Network managers often find themselves competing with more tangible, easily understood business applications for strategic budgets and senior-level attention. Networks have a hard time rising to the top of the list of strategic priorities. This is ironic, as the networks have become enablers (or sometimes inhibitors) for those new applications and business models that are more easily understood."

The majority of respondents, 52%, say IT's primary responsibility is to improve business process efficiency (32% say IT's primary responsibility is fixing hardware and software issues and 25% say it's improving security to mitigate potential IT-related threats). Also, overall, 42% of respondents agree that IT's main strength is the efficient execution of general business processes.

IT Plays Strong Role in Financial Performance at High-Performing Companies

But among the highest-performing companies, which Juniper and the Economist Business Unit define as those companies who report their financial performance is stronger than their peers, IT is seen in a different light.

Compared with their peers, 20% more of high-performing companies say technology plays a very strong role in their organization's financial performance; 11% more say they strongly agree that the IT function can support business growth by identifying new market opportunities; and eight percent more say the IT function is very closely involved in helping develop new products.

"The highest-performing companies are also more likely to measure IT's performance in the context of business function," Iyer says. "They actually demand more from IT and they get it. The business should be demanding this. CEOs and executive boards should demand that they have a leader and a function that is strategically positioned and ready to contribute to growth."

"This is one of the few functions whose value is going to increase every few years, similar to Moore's Law," Iyer adds. "Figure out what you want, demand it and go out and recruit it. There are people out there who can do the job for you. Don't use the excuse that your IT guy doesn't have the skills."

Steps to Help IT Transform Into a Strategic Partner

In Iyer's view, there are several steps companies can take to facilitate better interaction between business and IT that can lead to real innovation as opposed to just business process improvement.


Originally published on CIO |  Click here to read the original story.
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