IT investment: Invest for better performance

If your IT department’s performance isn’t up to snuff, it may be because you spend too much time maintaining and repairing your existing systems, and not enough time investing in new technologies.

A global study by Accenture, “IT Investing for High Performance,” finds that among top IT organizations, 62 percent have a strategy for pioneering new technologies. In contrast, most average and low-performing IT shops prefer to “follow, not lead” in technology adoption. The study says that failure to invest in IT compromises business productivity.

High-performers distinguish themselves in how little time they spend maintaining and fixing applications. The top performers dedicate just 35 percent of their time to maintenance and repair; they spend 40 percent more time integrating and building systems than their lower-performing competitors. Respondents from the lowest-performing organizations report that almost half of their time is spent maintaining and fixing systems.

Bob Suh, Accenture’s chief technology strategist, believes that some problems of low-performing IT organizations are of their own making. For instance, if an IT group doesn’t spend enough time helping users define their requirements for a system, they will be stuck having to fix problems that could have been avoided if they had done more work up front.

In addition, says Suh, average and low-performing IT organizations may be caught in an “austerity trap,” in which companies attempt to sustain IT service levels while maintaining or cutting IT budgets. As CIOs focus on keeping IT costs down, they are inhibited from investing in new technologies.

To focus more on IT investment, rather than maintenance, Suh recommends establishing performance metrics to boost business confidence in IT and persuade executives to invest in new projects. “If [companies] choose to save money in the short term,” warns Suh, “they will face higher maintenance costs and have fewer dollars remaining to reinvest” for the long term. And then they will be unable to outperform their peers.

Accenture surveyed more than 300 senior IT executives from Fortune 1000 or comparably sized companies, and categorized respondents as high-performing, average or low-performing, according to how the respondents ranked themselves on a five-point scale. Those surveyed were asked to rate their current performance versus their goals on five dimensions: innovation, data management, integration, infrastructure and IT operations.

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Related links:

Canadian businesses under-investing in technology says report

Innovating with information technology

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Jim Love, Chief Content Officer, IT World Canada

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