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June 18, 2013

Just 27% of companies think IT contributes to strategic business objectives

Hornbill And Service Desk Institute research shows IT is still not aligned with business strategy.

By Duncan Macrae

Businesses are still failing to see IT as a strategic tool, according to research published by Hornbill Service Management and the Service Desk Institute (SDI) that compares the attitudes of senior executives and service teams.

In an independent survey of UK CIOs commissioned by Hornbill, only 27% of respondents said that senior executives viewed IT as contributing to strategic business goals, such as growth or diversification.

In contrast, 73% stated that IT is viewed either as a necessary trading expense that needs to be tightly controlled, or at best as a means to reduce costs and increase efficiency. There is a firm belief from those ‘on the ground’ that IT can do more than this, borne out by the SDI’s findings. In its own survey of its members, 98% believed that IT could play a greater part in advising how technology can support business goals.

Patrick Bolger, chief evangelist at Hornbill, said: "The simple fact is that IT is far more than just a utility. While 43% of organisations see it as simply a way to increase efficiency, and 30% see it as a trading expense that needs to be reined in, IT can be used for much, much more.

"The mythical separation between IT and business strategy needs to end, so IT can take its rightful place; providing services and capabilities that support mainstream business goals. Some organisations may well believe they are doing this: 67% of CIOs say that the IT department understands the vision and mission of their organisation, while 57% of SDI members say the same. Yet the fact that a sizeable minority say otherwise, coupled with executives’ view of IT, suggests more needs to be done."

While a majority of IT departments claim to understand the overall strategy of their organisation, there is far less understanding of departmental or business unit objectives. 57% of SDI members say they don’t understand the goals set for different business units, such as improving sales or customer retention. Furthermore, 66% say that service desk teams aren’t given adequate time to spend with other business units; which would help them understand these goals and how they can help achieve them. From the CIO point of view, 53% believe that service desk teams do not have enough time to spend with other business units.

Even if IT teams are engaged with business strategy, the way in which their work is recorded and reported often doesn’t allow any contribution they make to be measured. According to the CIO survey half of organisations either have no formal reporting mechanism for IT performance (17%), or have a mechanism focused entirely on metrics such as downtime (33%): reinforcing the view of IT as little more than a utility. In comparison 21% of organisations base their reporting metrics on user satisfaction, while 29% link performance to strategic business objectives such as improved sales and reduced customer churn. While this is not perfect, it still paints a rosier picture than the SDI research: only 16% of respondents measure the contribution of activities their organisation requests to actual business goals. This suggests that even those organisations that do measure performance based on business strategy may not be applying that measurement to the whole IT department.

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Bolger continued: "The key to any successful relationship is communication and understanding. Without this organisations will never realise what IT can contribute to their overall strategy, while IT itself will struggle to demonstrate value and prove that it can do so much more than just keeping the lights on. Indeed, 68% of CIOs state that senior executives and business units are not effective at communicating business strategy and individual line of business goals to IT.

"The SDI’s research shows that service teams are quite clear on what they need. 93% want better collaboration with business units to understand their goals and needs, while 82% want improved reporting of IT’s activities and metrics so the business has a clear understanding of its contribution. Lastly, 69% want clearer communication from executives about overall business plans and goals. H

"owever, any improvement in communication won’t come out of the blue: service teams should already be acting to demonstrate they can do more than simple ‘utility’ work. Indeed 92% also recommend the increased automation of low-value work, i.e. that which is closest to IT as a utility; in turn giving more time to focus on high-value interactions that support mission critical business activities."

The CIO survey was undertaken by independent market research company, Vanson Bourne, and covered 200 CIOs in the UK.

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