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How IT can become a driver of business growth

IT departments excel at boosting efficiency but fall short of driving business growth, according to a study from the Economist Intelligence Unit

By , Network World
December 10, 2012 04:07 PM ET

Network World - IT departments excel at boosting efficiency but fall short of driving business growth, according to a new study.

Technologies such as cloud computing, mobility, and data analytics can put IT in a position to move beyond traditional support/maintenance expectations and assume a more strategic role in the business. But most tech departments aren't taking advantage of the opportunity, concludes a new study conducted by the Economist Intelligence Unit and sponsored by Juniper Networks.

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The study, "Can the IT Department Keep Up With Exponential Growth?" asked 474 IT and business executives from the U.S., Germany, Japan and the U.K. about how the role of IT is changing to help capitalize on business growth opportunities.

Companies do a good job of leveraging IT to improve technology-driven business processes, the study found, but IT rarely plays a role in higher level strategizing -- identifying new markets and developing new products, for instance.

"Most business today primary rely on IT to increase their organizational efficiency," says Bask Iyer, CIO at Juniper Networks. That's an improvement from say, 10 years ago, when IT was seen primarily as a money pit. However, "IT is largely falling short of expectations to drive growth in new areas," he says.

Why the shortcomings? IT's lack of engagement in core business activities has a lot to do with long-held perceptions about what IT does, cultural boundaries and collaboration challenges, says Iyer, who was CIO at Honeywell before joining Juniper in 2011.

"A lot of companies really don't know how IT can help capitalize on business opportunities, beyond what they've already seen," Iyer adds. "They seem to have hit the wall."

When survey respondents were asked to describe the primary job of IT, their top three answers were telling:

  • To improve efficiency in business processes (cited by 52%)
  • To fix hardware and software issues (32%)
  • To improve security to mitigate potential IT-related threats (25%)

When asked about the IT's main strengths in enabling business growth, the top response was "efficient execution of general business processes," cited by 42% of respondents. Moreover, 20% of respondents believe that IT is only somewhat prepared or very unprepared to contribute to improved business growth.

The survey found that very few business respondents are successfully collaborating with IT on strategic business initiatives such as identifying new market opportunities (9%), identifying new innovations (6%) and developing a competitive strategy (5%).

"Very few businesses and IT functions actually collaborate on strategic business objectives. They tend to look at IT as back-office engine operators who run email and other systems and really don't have much of a role to play in strategic projects," Iyer says.

Not all companies feel that way, however. The companies that believe IT's role shouldn't be limited to efficiency improvements and tech fixes are in the minority -- but many share a common characteristic: they're top performers.

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