The recession has dented confidence in many sectors of the market – but companies are seeing the real value of their IT systems, and plan to invest in them going forward.
According to the global study released by Accenture and produced in cooperation with the Economist Intelligence Unit, 72% of business and information technology (IT) executives say their organisations place greater value on the IT function today than they did before the economic crisis. What's more, they view IT as an important part of their economic recovery efforts.
Consequently, executives expect technology spending to increase in their organisation either selectively (47%) or across the board (10%) in the next 12 months. Further, and perhaps surprisingly, non-IT executives appear even more bullish than those directly responsible for IT, as 61%anticipate technology spending boosts.
Confidence appears to be highest in the United Kingdom and Ireland, where 63 percent of respondents overall expect increased investment, with nearly as much momentum shown in the US, Spain and Italy. The survey was conducted in the US, UK, Ireland, Germany, France, Spain and Italy.
Willie Schoeman, Accenture’s managing executive: technology in South Africa, says: “The results of this survey underscore the very same positive signs that we are seeing in the local IT markets. Organisations are starting to invest in technology again, not as mere strategy to survive, but to quickly gain competitive advantage."
The need to invest in technology notwithstanding, the study also shows that companies will keep a close eye on the returns delivered by IT. Accordingly, the vast majority (8%) of executives across all geographies say they are under increased pressure to deliver projects that incorporate more flexibility than was previously required. In the US, 87% of respondents agree with this statement, while in Europe this pressure is felt most acutely in France, the UK and Ireland.
The survey of more than 550 executives highlights that cost savings and control remain a key driver when it comes to IT investment decisions. The respondents identified three measures as most effective in reducing the cost of implementing IT projects: Ensuring the stability and business relevance of project requirements; the replacement or rationalisation of existing systems; and movement to open platforms.
In terms of specific areas of investment, IT leaders have a much clearer idea than their business counterparts with regard to priorities for new projects over the next year. By far the most pressing priorities of IT chiefs are for server virtualisation and consolidation (44%), whereas business managers in general rank virtualisation as important as customer relationships and service. While acknowledging the importance of customer relationships and service, IT chiefs are also expecting significant funding for e-business (32%) and service-oriented architecture (SOA) projects (31%).
Technology performance metrics and clearer definition of risks are also taking on greater importance. Over three-quarters of executives at global firms now use either financial, productivity or progress metrics to measure the performance and benefits of their technology investments. Additionally, 27% of IT executives now use a specific methodology or governance framework to assess the business impact of their IT investments. However, in around half of cases of those surveyed, metrics are still only partly implemented. In about one-third of the firms surveyed, metrics are still not being used at all.
“In a year when the eyes of the world will be on South Africa in anticipation of the FIFA 2010 World Cup, there are also great local anticipation for an increase in IT investments, despite the continued challenging economic conditions” adds Schoeman. “High Performing organisations will quickly realise efficiencies and cost savings, while unlocking real business benefits through new-age/emerging technologies. We also anticipate an increased focus on the tools and processes that will track the return on these investments.”