Stirring up the IT pot

While a Bain survey seems to have turned up some interesting numbers and perceptions, it doesn’t merit the inflammatory headline. Bain unfortunately chose to play up the glass-half-empty view of the results, touting the fact that IT isn’t as effective at helping companies capitalize on the stuff they know least about. Surprise, surprise.

Summer is a good time to slap IT folks around with profound statements, like Nicholas Carr did last year with his Harvard Business Review story “IT doesn’t matter.” While not quite as stirring, Bain & Co. created a ripple with a recent survey that showed 60% of senior executives view IT as “inhibiting growth in key areas.”

But that’s looking at the glass half-empty. The survey – “Is IT a bottleneck to growth?”- found that 70% of senior executives agree that “IT is highly relevant to enabling their companies to grow.” (The survey was of 359 companies, and the majority of respondents are said to have C-level finance, IT or general management positions.)

The bad news creeps in when the question gets specific about IT helping or hindering growth in key areas. Bain says that while views of IT are favorable when the question is about core business growth initiatives – retaining customers, growing current customers or acquiring new customers in the same market – they are less favorable in what Bain calls growth adjacencies.

Listed in order of increasing distance from the core, these adjacencies include: new products or services; new types of customers; new channels; new geographies; and new steps in the value chain.

Of the respondents who viewed IT as an inhibitor for growth in these areas, Bain says more than half of the respondents said “lack of information or transaction capabilities were causes for the bottlenecks to growth.”

Not surprisingly, Bain found that respondents who worked for companies that spend more on IT tended to view IT as a significant growth-enabler, while those who were less optimistic tended to spend less. The positive bunch spends 7.4% of revenue on IT on average, while the pessimistic spend 4.7%.

Among those who view IT as a bottleneck, Bain attributes the perception to four factors: the age-old lack of alignment of IT with business needs; under-exploited systems that didn’t deliver promised capabilities; lack of IT or vendor skills; and complex legacy systems that aren’t flexible enough for current demands.

While the survey seems to have turned up some interesting numbers and perceptions, it doesn’t merit the inflammatory headline. Bain unfortunately chose to play up the glass-half-empty view of the results, touting the fact that IT isn’t as effective at helping companies capitalize on the stuff they know least about.

Surprise, surprise.