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August 5, 2015

IT spend is an enabler, not a driver, of business

Kable Global ICT Intelligence: Organisations are not looking to gain new revenue streams from spending.

By Alexander Sword

Analysis from Kable reveals that raising efficiency is still the primary business objective influencing IT investment strategies.

Rating the importance of each objective to a maximum score of 4, raising efficiency was given an average rating of 3.

Increasing customer satisfaction ranked second, with 2.9, while cutting costs and increasing revenues both sat at 2.8. Achieving or maintaining regulatory compliance followed with 2.7.

In last place was improving supplier relationships, which achieved an average score of 2.5.

This suggests that businesses still prioritise IT departments as a way of meeting internal targets and addressing internal problems, rather than increasing external business. In addition, IT was not seen as a driver of new business but a way of streamlining existing processes.

These concerns corresponded with IT objectives, which saw aligning IT with overall business goals as one of the most important objectives influencing IT investment strategies. This achieved a score of 2.7, as did better demonstrating the value of IT to the business, meeting internal service level agreements, and supporting revenue growth.

Service to customers was again given lower priority, although the difference was marginal; delivering new functionality to business users received an average score of 2.6.

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These priorities again reflect a view that IT is an enabler of existing business strategy rather than a source of new revenue streams.

Accordingly, the priorities cited by respondents in selecting an IT provider included expertise in their industry, financial stability, leading-edge technology, price and specific functionality expertise or depth. These all achieved an average rating of 3.0.

Factors such as breadth of solution offerings and contract flexibility followed with 2.9 and 2.8 respectively, while financing options and geographical reach came last with 2.7.

As Cronos, the e-business integrator comment on their website, "ICT is not really ‘the business’ of most organisations; ICT must be an underlying tool to drive the organisation’s core business.

"Clients must focus on their core activities and ICT must add value to help as a vital support to make operations more successful – easy, responsive and optimal performance."

All figures come from Kable’s ICT Customer Insight survey, which polled 2685 respondents, from across the world in Q4 2014. The survey findings include data on hardware budget allocation, telecommunications budget allocation and software budget allocation. Subscribe to Kable here.

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