The November 2010 issue of the McKinsey Quarterly reported the findings from their 5th survey on information technology strategy and spending. From my perspective as an IT professional, the reported findings were a mixed bag: a few surprises, a few not-surprising findings, and definitely some good news for at least some of us. Their October survey of 864 executives included both IT and non-IT execs from a wide range of industries, regions, and organizational sizes. I would like to express my appreciation to the McKinsey Quarterly and acknowledge the authors of their article, Roger Roberts and Johson Sikes, quoted here in accordance with their terms of use.
I'll start with some findings that did not surprise me: businesses demanding more value from IT and desiring for IT to turn data into business intelligence to support growth and innovation. The top IT priorities reported were:
- Improving cost efficiency of business processes
- Reducing IT costs
- Improving the effectiveness of business processes
- Ensuring compliance with regulations
- Getting managers the information needed to support planning and decision-making
All of that bodes well for those of us in the business of deploying and supporting SAP's business intelligence tools, GRC solutions, and Enterprise Information Management.
I also took it as a good sign that, while continuing to work on reducing IT costs, deferring and scaling back projects were reported to be lower priorities for the coming year. For all of us who have had projects shelved or slowed down during the downturn, that expectation is a welcome suggestion of better days ahead. McKinsey reported that 55% of the surveyed executives expect to increase IT investments in the coming year; it would have been interesting to see that broken down by industry segment and geography, but I suppose we'll have to take the good news for what it is.
I'll have to confess to a few ironic smiles from some of their findings. Concerning barriers to use of data-driven decisions, the top responses among those surveyed included:
- Lack of data
- Lack of analytical skills
- Little to no interest in changing the organization's decision-making process
- Decision-makers unaware of available data
Where to start? Let's see, if the organization has not been keeping up with the latest developments in IT tools, especially BI tools, it is no wonder that a lack of actionable business data resulted. As for lack of analytical skills, along with toolsets that have not been kept up at current releases, could it be that training was another area that suffered budget cuts for the past several years? When training is nothing more than team members showing one another how to back up each other during absences, it is no wonder that skills can fall behind. For those organizations that have not been sending both IT professionals and business users to training and conferences, this finding is scarcely a surprise. I think that the challenges of an organization that refuses to consider changing its processes are self-evident and need no comment.
The survey reported additional findings I found positive for IT professionals. The top actions planned in the next 12-18 months were reported to be:
- Increasing infrastructure consolidations or virtualization
- Looking to IT as a lever to reduce costs in other areas of the business
- Focus on efficiencies in application development and maintenance
Only 9% of those surveyed expect to increase outsourcing or offshoring, which is down from last year. Again, it would have been interesting to see that broken down by industry and region.
I think that, overall, the findings bode well for SAP's strategic focus as reported by CTO Vishal Sikka of on-premise, on-demand, and on-device solutions, so I would take these findings as generally promising signs for the year ahead.
