Has IT done enough to cut costs?
For some time now, the buzz around IT has been that it needs to do more than keep the lights on and help reduce costs; it must also help companies innovate and drive new opportunities for growth. If your organization is doing more of the first set of tasks than the second, it turns out you're in good company.
Most businesses still rely on IT primarily to drive operational efficiency, according to a new study by the Economist Intelligence Unit and sponsored by Juniper Networks. However, companies with stronger financial performance than their peers view IT in a different light, reports the study, Can IT Keep Up With Exponential Growth?. (The research was based on a survey of 474 senior executives, managers and board members.) These high performing companies were more likely to identify IT as important in finding new market opportunities and in developing new products and services.
"Businesses still view the IT function in the traditional role of improving process efficiency. However, to really take advantage of an increasingly digitized world, companies need to recognize the potential value of IT as a collaborative partner in identifying new opportunities," said Rozina Ali, deputy editor at the Economist Intelligence Unit.
So if your IT organization is not doing a lot to drive business growth at the moment, you're probably in line with most of your industry peers. Just 9 percent of those surveyed said they successfully collaborate with IT on identifying new market opportunities. But this may soon change. The study found that 60 percent of the executives polled expect IT to be more closely involved in developing new offerings in the coming three years.
If studies like this one aren't enough to convince you and your CEO to shift IT's mission away from identifying yet more ways to cut costs--toward identifying more ways to improve growth--take a look at another item we're highlighting this week.
In a post at Harvard Business Review, Casey Haskins and Peter Sims outline the ways in which too much efficiency can paralyze a company that's facing disruptive change. In today's business environment, the company that can adjust readily to change has a better chance of survival than the one that has eked out every possible efficiency at the expense of innovation and adaptation. - Caron