Survey Shows Linking IT Investments to Business Outcomes Difficult
A survey of more than 100 IT and other executives conducted by IDG for IT solutions provider Datalink, revealed some of the most common challenges currently facing businesses as the result of rapidly advancing technology. While the technological revolution has made IT investment a virtual necessity, deciding what type of IT investment will be most profitable can be difficult.
Most Cited Business Challenges
One challenge cited by 38 percent of respondents in the survey was that of increasing standardization. Some benefits of standardization include consistency and predictability, which translates into the ability to more successfully predict business outcomes. It also makes a greater degree of innovation and flexibility possible. Thirty-four percent of respondents cited streamlining operational business processes as one of their greatest challenges, while 33 percent felt that time-consuming manual processes adversely affected their bottom lines.
Remaining competitive in today’s high-tech marketplace means that whatever business you’re in, consumer demand for the ease and convenience of user-friendly mobile applications is at an all-time high. Thirty-one percent of respondents listed the need for increasingly complex and sophisticated app development as a major challenge.
Developing applications that automate many time-consuming repetitive tasks can be a big investment. For example, a 2015 global survey of 8,000 mobile app developers conducted by Vision Mobile revealed that 43 percent of mobile app developers working on apps for business enterprises earned more than $10,000 per month. In contrast, only 19 percent of developers working on consumer apps earned a comparable salary.
Most Needed Changes
Two of the biggest challenges, streamlining operational processes and increasing standardization were cited as the most important changes respondents believed were necessary for their businesses to succeed. The third most important needed change, cited by 37 percent of respondents, was updating or replacing legacy systems .
Experts generally agree that modernization of IT systems becomes necessary when current systems prevent your business from successfully competing with the competition. This might be because they cost more to maintain than the revenue they generate or because they don’t allow necessary upgrades. Finally, 35 percent of respondents listed successfully learning new skills and adapting to changing operational roles as a necessary change. Automation is affecting the workplace on every level, and new IT systems mean learning new programs.
IT Investment Considerations
Security was the number one consideration regarding IT investments, cited by 70 percent of respondents. Managing costs and the desire to improve customer experiences were also major considerations, both cited by 59 percent, closely followed by greater operational efficiency at 52 percent.
There are a number of outside factors that companies must take into consideration when developing an IT investment strategy. Sixty-five percent of business owners are concerned with potential security breaches, and 43 percent cited legal issues surrounding increasingly strict compliance/regulatory mandates. Those increasingly stringent legal mandates are accompanied by higher consumer expectations. Thirty-nine percent reported that smaller IT budgets were also a consideration.
The most popular IT strategies consisted of Agile software development and process automation, both cited by 22 percent of respondents. Switching to IT as a service was considered a viable strategy for 21 percent, while 20 percent favored a converged data center infrastructure. Only 18 percent favored cloud management. With so many relatively new options, it is no surprise that only 47 percent of respondents felt confident that they could demonstrate the impact of their IT investments on their business outcomes.
The greatest perceived IT difficulties were security and compliance management, at 44 percent and 29 percent, respectively; however, in actual practice, 49 percent reported that the greatest difficulty was process automation and 37 percent reported that it was application performance management. With regard to specific IT projects, planning was cited as the most difficult aspect by 41 percent, building by 36 percent, testing by 32 percent, and successfully running the newly created system by 25 percent.
According to an article in Forbes, an INSEAD study showed that businesses with well integrated IT infrastructures were more likely to increase productivity by investing in advanced technology. It also showed that the single most important determining factor of whether investing in IT will be profitable is “digital maturity.” A “mature” digital platform is one in which a company’s technology, business processes, and data components are fully integrated.
While 70 percent of those surveyed believe that linking IT investments to business outcomes is important, 68 percent prioritized business goals over IT operational goals. In the final analysis, the potential for transforming IT investments into higher profits depends largely on the state of the system currently in place. Determining the strengths and weaknesses of an existing system is the best place to start when deciding whether the best IT investment would be to update, add onto, or replace it.