Executives See Need for IT Improvement but Lack Execution

It is summer here in the northern hemisphere and the heat is on. In addition to the scorching temperatures, it is also report publishing season, and my summer reading has been filled with some hot insights that are worth sharing.  In fact, I’d like to draw attention to the latest addition to my digital library: the new study from international executive change advocacy group, Business Performance Innovation (BPI) Network, titled, “Accelerating Business Transformation Through IT Innovation: Getting the Business Leader Take on the IT Change Mandate.”

Done with sponsorship from NTT (News - Alert) Group’s Dimension Data business unit, this is the latest research from BPI Network’s “Transform to Better Perform” knowledge transfer initiative which is aimed at helping its 50,000 global members. 250 global IT leaders were interviewed on a variety of issues.

The latest research is aimed at rating the level of innovation in the IT organization. The good news is that the study found that the vast majority of business decision makers are dedicating more time and attention to understanding the strategic implications of disruptive technologies, working to improve their systems and not just putting out fires. The other good news is for vendors, as those surveyed also want their companies to do a better job of embracing modern technologies and new channels of customer engagement and digital experience. Thus, it seems consumer and provider are generally on the same page.

The executive summary of the report does well to lay out today’s operational realities:

AGILITY. SPEED. INNOVATION. That’s the mantra for today’s data-driven business leaders, particularly those at the forefront of their sectors. The exact words may vary – nimble, lean, predictive, adaptive, flexible, inventive – but the core thinking remains the same: markets change quickly and those who have the analytical insights and the technology to respond instantly will find themselves best-positioned to profit.

This sentiment was echoed by many of those interviewed: nearly 70 percent of global managers surveyed believe technology has become “far more important” to their business.  An issue is that only 46 percent rated the level of innovation in their IT groups as good or very high, with 44 percent rating it poor or just making progress. The results become even more disconcerting when factoring in that only 40 percent of respondents felt their IT groups are doing a good job of becoming a more strategic, responsive and valued business partners, while 57 percent who view their transition as poor or only making moderate headway. As the report points out, this is a disquieting disconnect.

Those interviewed see the role of technology as helping them gain competitive advantage in a variety of ways, and thus differ in opinion on which technologies will be the most important.  Those are:   Real-time intelligence from embedded sensors -- Internet of Things (35 percent); always on, highly scalable and available Web business models (34 percent); Micro-targeting and personalization using Big Data analytics (32 percent); Social media data mining and more efficient engagement (27 percent); and Proliferation of smart mobile devices and apps (25 percent). These are the main avenues those surveyed see their technology being focused on.

In terms of performance metrics, 40 percent of survey respondents believe an IT organization’s ability to bring ideas and solutions for furthering business performance is just as important as ensuring the reliability, scalability and security of IT infrastructures. This was followed closely by: the quality and timeliness of application delivery (35 percent); incidence and speed of problem resolution (33 percent); and customer satisfaction with tech-driven business interface (28 percent).

“From the C-suite to operational units, senior managers are eager to see progress in implementing a broad range of technologies that increase their agility, improve customer experience, and make their companies more competitive,” notes Dave Murray, head of thought leadership at the BPI Network. “We believe this constitutes a new scorecard for IT, with greater emphasis on IT’s role in driving business growth and market differentiation.”

Much has been written recently about the need for IT to be more aligned with business objectives and to be business drivers themselves even as the very nature of IT transforms in terms of responsibilities, accountabilities and skills.  In fact, the survey found that C-levels are expecting more from their IT departments relative to where and how transformational technology can impact business performance. Those expectations go right to the heart of C-levels’ dominant concerns about enhancing the customer experience, as customer-facing innovations are the top three areas survey participants see technology uplifting business. Chief among these are:

• Making it simpler and easier for people to do business with us
• Enriching the way we interact with customers and partners
• Improving the customer experience overall

Simply put, upper management is paying closer attention.  Part of this is no doubt a result of C-levels increasingly running their organizations from their tablets and smartphones.  Hence, while the authors of the report state surprise that 87 percent of business line executives surveyed report they are devoting more time, or are committed, to understanding the strategic implications of technologies, it is a logical following of their increased reliance on technology.

The top five IT transformational imperatives respondents would like to see in their organizations. are:

• Improve responsiveness to ever-changing business requirements
• Focus on digital experience as a competitive advantage
• Understand and embrace disruptive technologies
• Deliver applications faster, better and at lower cost
• Rethink how to better engage, acquire and service customers

The survey also lists the top challenges for embracing new technology internally. These may seem obvious since they have been the subject of discussion for years but are worth reiterating since details as to how they are overcome remains very much a work in progress to say the least.  They are:

• Gaining consensus and support for new technology investments
• Minimizing information security risk, vulnerability and threats
• Determining needs and optimal solutions available
• Successfully implementing and gaining organizational adoption
• Integration of back-end systems with customer-facing channels

It is this last point about what it is going to take for IT and the non-technical C-levels to (pardon the fall back on an old technology term) “cross the chasm,” that should serve as either a wake-up call or reminder, i.e., actions speak louder than words.

As stated above, the good news is that C-levels have an understanding of the importance of adopting transformative technologies to create, obtain and sustain competitive advantage. At the same time, however, IT departments need to clearly lay out what exactly they can do to help effectively. If they can demonstrate how investing in next generation technology will benefit businesses, both sides can help each other. In fact, what all of the recent studies have shown, regardless of vertical market, is that companies that invest in next generation technologies do perform better than those who are laggards, and that gap between awareness and action needs to be closed and done so with some sense of urgency.