Execs expect more innovation from IT departments

February 08, 2011 Anthony Plewes , Digital Transformation

One of the major obstacles facing IT managers in recent years has been the perception that they should constantly be doing more for less. But while value for money is still paramount, executives are increasingly keen for technology leaders to deliver forward looking strategies that underwrite business growth and innovation, according to management consulting group McKinsey & Company, which has recently completed its fifth survey on business and technology strategy.

Many of those surveyed were happy with the work done by their IT departments. However, these teams are under pressure to generate benefits from transformational technologies such as cloud computing and turn the massive amounts of data generated by companies into information assets that support growth and guide innovation.

Recently, two commercial concerns have been high in the minds of company executives - the emergence of new products or services from competitors; and competitors’ development of new offerings outside their current scope, such as telecommunications companies offering cloud computing services.

Of course, a clearer understanding of what technology can do for their business and how best to implement it would help these executives maximize their investment in IT. In the meantime, the fact that an increasing number appear to view their IT departments as a source of competitive advantage rather than simply a cost center is an encouraging development for technology managers.

Less than one in four of those executives surveyed by McKinsey & Company said the primary function of the IT department was delivering services at the lowest cost compared to one in three in 2008 and almost 40% expect IT to help drive broader business efficiency.

The survey also suggests that fewer technology projects are being scaled back or deferred - more than half the respondents indicated that their companies would be increasing investment in this area in 2011.

Integrating data and analytics more completely into business decisions and taking greater advantage of emerging cloud computing platforms were highlighted as key trends. Business intelligence and analytics are changing the way decisions are made with data being more widely used across all aspects of business, while the cloud’s promise of increased agility is a particularly attractive feature. More than 80 per cent of IT respondents said their companies were using or experimenting with cloud technology.

Anthony Plewes

After a Masters in Computer Science, I decided that I preferred writing about IT rather than programming. My 20-year writing career has taken me to Hong Kong and London where I've edited and written for IT, business and electronics publications. In 2002 I co-founded Futurity Media with Stewart Baines where I continue to write about a range of topics such as unified communications, cloud computing and enterprise applications.