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Innovating for growth: IT’s role in the new global economy - EY - Global

Innovating for growth: IT’s role in the new global economy - Global IT performance survey 2011

73% of respondents say the Chief Information Officer could become a key figure in driving business change.

Summary: Expectations are mixed on how IT can support the business over the coming years. Although many are looking to IT for innovative and strategic input, there are doubts over the department's ability to deliver.

The disconnect between expectations and delivery from IT

Survey respondents reveal their thoughts about IT’s place in the business

Expectations vary wildly on how IT can support the business over the coming years. Our survey respondents had these thoughts:

  • There’s considerable confidence in IT’s potential to help respond to market place changes. The business looks to their IT departments for innovative strategies
  • The CIO could become a key figure in driving business change
  • Only 15% of respondents believe the IT function is very well prepared for future demands
  • IT needs to be understanding of the business and make effective communication a priority
  • Non-board respondents are concerned about IT’s budget planning and control capabilities
  • Across the survey, CIOs tend to have a higher opinion of their performance than their non-board and C-suite counterparts

What the role of IT could be

The findings from our survey suggest that the IT function could take a number of steps to improve both its contribution to corporate performance and its reputation among internal stakeholders:

Build stakeholder confidence

  • Confirm that IT understands both the business strategy and its own expected contribution
  • Review and enhance IT’s communications skills. This leads to more satisfaction with the IT function, particularly at the board level
  • Focus on obtaining, managing and analyzing data, for regulatory reporting and to meet other stakeholder expectations

Achieve cost competitiveness

  • Introduce more rigorous measurements for IT expenditure planning and control. Work with the business to better quantify return on IT investment
  • Report all measures clearly and regularly to the board

Bring agility to operations

  • Assess IT’s skills in innovation, business change and managing IT-related risk
  • Be clear on what the business wants to achieve from outsourcing and construct your approach around these goals. Build the necessary skills to manage an integrated sourcing strategy

Optimize customer reach

  • Become a champion for data analysis and management, to help organizations proactively address macroeconomic trends and profitable market opportunities

Perceptions of IT vary wildly at the C-suite level

The majority of Chief Information Officers see the IT function as a contributor to change. But almost half of those in a C-suite position view IT as a basic utility that keeps the business running.

These results suggest that IT leaders exert less influence than they realize at the most senior levels.

Indeed, less than one in three (28%) of executives report that the CIO (or equivalent) occupies a seat on the board of their organization.

The many roles of IT

IT also has to consider its most appropriate role. In some cases, particularly for larger, global companies, senior management may expect IT to provide innovation and transformation, whereas in certain smaller firms the emphasis could be upon a more basic service, to keep costs down and serve daily operational needs efficiently. Typically, IT fits into one of four broad categories:

  • Utility: keeps the business running
  • Protector: manages the IT estate
  • Performer: delivers tangible value and improvements
  • Transformer: brings substantial change to the business

Agreed: they’ve got potential

Although the average CIO has yet to reach the corporate board, organizations are starting to realize the latent possibilities within IT.

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