Over the past few months in this blogsite, I and other commentators have been discussing the impact of technology on companies as they emerge from the other side of the recent downturn. Now, some new data shows that the recent downturn strengthened business' appreciation for IT, and that they are looking to IT to guide their enterprises forward into the next growth phase. But, there needs to be a better way of actually measuring what IT delivers to the business.
The economic tsunami has roared through, leaving plenty of carnage in its wake, especially within the financial services sector. However, many companies see information technology as the way forward. The new survey of about 200 financial executives, sponsored by Micro Focus, a legacy systems transformation vendor, finds that even though companies are under plenty of pressure to cut costs, they fully intend to keep up the pace with IT spending.
While just over a third of respondents (35%) say the level of IT staff at their company has decreased over the past year, the number drops to 21% over the coming year. About 42%, in fact, say they will be beefing up their IT functions over the coming year, the survey confirms. In addition, 58% of respondents say their company remains committed to most IT investment decisions made before the downturn, and 39% are delaying or scaling back projects. Very few respondents (2%) say their company is stopping IT projects without expectations of restarting them.
The coming economic expansion period will clearly be one led by companies making the most effective use of technology. Indeed, the survey confirms that many financial executives say that IT will be fundamental in helping to pursue long-term growth opportunities as well as near-term cost savings. A majority of respondents say IT will play a very important (22%) or somewhat important (49%) role in their company’s competitive position as it emerges from the economic downturn.
However, companies don't intend to simply start pouring money back into IT willy-nilly. A “show-me-the-money” attitude pervades. A majority of respondents (64%) say they are “very likely” to explicitly consider the time required to earn a positive return when making IT investment decisions. And, when queried on the investment criteria they apply to IT decisions, respondents are much more likely to say they give “a great deal of consideration” to an investment’s near-term benefits (34%) than its long-term, hard-to-measure benefits (19%).
There’s also the rub that IT investments are very difficult to measure—the vast majority of financial executives in the survey report that IT return on investment is either somewhat (52%) or very difficult (27%) to measure.
The challenge to IT proponents is while they have the support of their organizations, they need to do a better job of linking IT projects to actual business gains. The survey results show that business leaders understand that IT helped pull their organizations through the downturn, but they need to know where the impact is greatest. The best approach to document progress is by identifying measurable key performance indicators, which are linked to results such as customer retention, customer satisfaction and individual product sales. The impact of IT needs to be reflected directly in business results.
Joe McKendrick is an author, consultant, blogger and frequent INN contributor specializing in information technology.
Readers are encouraged to respond to Joe using the “Add Your Comments” box below. He can also be reached at email@example.com.
The opinions of bloggers on www.insurancenetworking.com do not necessarily reflect those of Insurance Networking News.
Register or login for access to this item and much more
All Digital Insurance content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access