Business service management maven BMC Software is gearing up to publish the results of a study that found there are broadly three types of companies when it comes to IT investment: ‘thrivers’, ‘survivors’ and ‘hiders’.
CBR was given a sneak peek at the results prior to their publication tomorrow, and quizzed BMC’s Luca Lazzaron, VP and general manager EMEA, about their findings in this exclusive podcast.
The BMC-sponsored survey was conducted by Loudhouse between June and July 2009 across the UK, France and Germany, and included interviews with 100 CIOs per country with an average turnover of over 2 billion euros.
With additional analysis from the London School of Economics (LSE) and global consultancy McKinsey, the headline finding was that businesses that continue to invest in IT are better positioned to weather the economic downturn, and will be better equipped to capitalise on any future economic recovery.
“The lesson we can draw here is that companies cannot simply save their way back to recovery,” said Dr. Alexander Grous of the Centre for Economic Performance at LSE. “Innovation deficits are extremely hard to redress. Organisations that recover best are those investing in areas of the business that can deliver long-term returns – areas such as IT.”
The study identified three categories of companies: ‘thrivers’, ‘survivors’ and ‘hiders’. Thrivers made up 25% of the sample, demonstrating a greater focus on IT automation as a route to cost-cutting, while only reducing innovation spend by 0.5% overall. This group also reinvest IT savings to further enhance business efficiency.
Roughly one-third of respondents were put into the ‘survivors’ camp. The study concluded that these companies were in crisis mode, reacting to conditions with short-term cost-cutting and, “trying to make it out of the recession alive,” according to the researchers.
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Based on the survey data, in a ‘survivor’ company, decision makers tend to be more detached from the heartbeat of their business, with only 56% in frequent contact with their end-user customers.
The last group, and the one with most potential for improvement according to Lazzaron, is the ‘hiders’. These are companies that have not yet begun to deal with the impact of the recession on their business. 40% of companies were found to be in this group. CIOs in these companies are much less likely to streamline their IT operations, with only 28% compared to 38% of other respondents.
‘Hiders’ also have fundamentally lower expectations about their IT organisation’s ability to help other parts of the business to drive down costs (58% versus 68% of other businesses).
Speaking to CBR, BMC’s Lazzaron said that the ‘hiders’ group was the biggest surprise to BMC. “These companies are saying that it’s business as usual,” he said. “They don’t see the opportunity for innovation that the ‘thrivers’ see, and they don’t see the link between IT investment and business success.”
Lazzaron said that the ‘hiders’ group presents a challenge to the industry, as BMC believes that they should see a tighter link between IT innovation and operational efficiency and performance. “The industry has got to do a better job educating this group,” Lazzaron said.
Hear CBR interview Lazzaron in more detail about the study findings, the differences between the three camps and whether or not companies in the different groups are aware of their own position compared to their peers, by listening to our exclusive podcast.
