Survey: technology investments boost odds of success
If you're looking for evidence that technology investments can make a difference in your company's success, a survey made available by The Economist Intelligence Unit (and underwritten by Oracle) may help supply you with some ammunition for your argument. (Available for download here.)
Overall, 78% of survey respondents agree that IT makes their company more competitive, and two-thirds believe that it gives their organization the flexibility to respond to market changes. Technology investments with the most impact: customer relationship management (CRM), knowledge management, collaboration tools, data integration and support.
While this survey was conducted and written in 2007, the findings bear significant relevance in the current rough-and-tumble (but recovering) economy. Of particular interest is the fact that the survey broached the foggy subject of return on investment (ROI). Sixty-one percent of executives say ROI is determined by rises in staff productivity. Three other gauges, each used by more than 40% of companies, include revenue generated, speed of decision-making, and process/project time to completion.
Here's a kicker. More than over one-third of executives, 39%, say that the return on IT investments is higher than they thought it would be.
What's the main issue holding back IT productivity? The cost and effectiveness of software applications stand out as a significant constraint on their companies’ growth. Almost 70% mention cost, making it the most-cited growth constraint. About 60% are also not convinced that software applications are effective.
Still more ammunition for making the case for IT in good times and bad came from Andrew McAfee of Harvard Business School and Erik Brynjolfsson of the Massachusetts Institute of Technology, who published study that connected increased IT investment with corporate success.
McAfee reports that the criteria he and Brynjolfsson used to determine "success" would be to look at market share before and after the mid 1990s, when IT spending began to go through the roof. McAfee found that "'high-IT' industries experienced significantly greater turbulence and concentration growth after the mid 1990s than they did before. 'Low-IT' industries," however, tended to be stagnant.
Or, as McAfee and Brynjolfsson observe in a related Wall Street Journal article on the study: "On average, the whole U.S. economy has become more "Schumpeterian" since the mid-1990s. [Joseph Schumpeter coined the term "creative destruction" in 1942] What's more, these changes have been greatest in the industries that buy the most software and computer hardware."
But remember, there has never been an expectation that IT would be solely responsible for a company’s rise or fall. Adroit management, supported by the right IT tools, makes the difference. A company that smartly and innovatively leverages its IT in new and creative ways will move to the head of the pack. And, thanks to IT, you don’t need a workforce of thousands to do so.