CEOs are constantly disappointed by IT. It never quite fulfils their hopes and always has more than a few shortcomings, yet their faith in it continues undaunted, according to a recent survey.
Despite past performance, CEOs also continue to believe that IT will eventually solve all their problems and give them a competitive edge over other businesses, according to a survey conducted by Compass Analysis Canada Ltd. of over 650 CEOs and senior executives from around the world.
The survey, done in conjunction with The London School of Economics, showed that while 31 per cent had high expectations for technology, only 12 per cent found that their expectations were met. But 37 per cent still expect high contributions from IT for their business in the future.
CEOs believe the IT vision fails in execution and that progress, when it happens at all, doesn’t occur fast enough.
“We always seem to be one year away from achieving high value,” said one executive interviewed by Compass.
Many CEOs also complained that it was difficult getting any benefits from IT. “We see the value of IT all right. We just can’t, as yet, find the way to realize it,” said one executive surveyed.
The goal of IT systems has changed dramatically over the years, explained Compass vice-president Max Staines. Whereas once IT’s main function was to replace humans through automation, thereby reducing cost, now CEOs are looking to IT to give them a competitive advantage.
Corporations are now spending millions of dollars on ERP and other IT systems and they expect a tangible return from that investment. And when that return doesn’t materialize, they’re disappointed, Staines said. But companies are also inefficient at measuring the value they gain from IT, and therefore they may not appreciate the value they do receive. “Businesses aren’t measuring the value contribution that IT is making to the business properly,” he said.
People have to change their approach to technology, Staines said. The survey indicated that when the CIO had an integral role in defining corporate strategy, 36 per cent rated IT as being a top business contributor.
“The technology itself has no value to it. It’s how humans use the technology, how we as business people apply the technology to solve a business problem,” he said.
Whenever companies see a new piece of software they are immediately seduced by it, according to Bill Bishop, Toronto-based author of Strategic Marketing for the Digital Age. They buy it and install it and are at first happy with all the new things that it can do, but then a point always comes when they realize that the software can’t do all the things they need it to do and that it’s not compatible with all their existing systems.
“Instead of designing the model for what they want to achieve and then putting into place technology that will help them achieve that model, they’re saying, ‘Here’s the software and now I’m going to basically do what that software is doing and I’m not going any farther than that.’ They’re starting with the software first,” said Bishop, who is also the CEO of Bishop Information Group.
What companies need to do instead, he said, is design an integrated system once they’ve figured out their business plan. As it is, companies are “just piling technology on top of technology. So all these people are just building a house without a blueprint. No wonder they don’t like the house when it’s built.”
The Compass survey also revealed that, worldwide, Canadian CEOs were the most disappointed in IT, and they rated among the highest in terms of expectations for IT.
Only 11 per cent of Canadian CEOs ranked IT as being a top contributor to their business. In Scandinavia, on the other hand, IT exceeds the CEO’s expectation.
These cultural differences are hard to completely understand, Staines said. “I’m speculating, but I think the expectation in Scandinavia is somewhat lower. The expectations in Canada are very high.”