What drives enterprise efficiency?
19 November, 2009
By Mark Cox |
A new global study of Chief Information Officers and IT decision makers reveals hidden insights into the practices and technologies that are unlocking efficiency and innovation in large businesses worldwide. As a part of Dell's Efficient Enterprise strategy, the company began research collaboration with the London School of Economics (LSE) to engage global CIOs in a multi-year study to track the practices and perceptions of some of the world's leading IT decision-makers as they work to create enterprise efficiency.
"When speaking to CIOs and IT decision makers across the globe, a common theme of stopping IT waste and unleashing resources consistently arose," said Dr. Jonathan Liebenau, London School of Economics who, along with LSE researcher Patrik Karrberg, is running the study. "Companies clearly place value on efficiencies through technology and new management practices, but many struggle to define the return to the business."
Underscoring that fact is that while more than 90 percent of respondents in the survey found that IT investments provide value for money, more than 30 percent were not able to specifically quantify the value derived from IT.
The initial results in the first of three planned surveys underscore that the key tenets of the Efficient Enterprise -- standardization, simplification and automation -- can help CIOs and IT decision makers drive innovation and productivity, two key goals of an organization's IT strategy, according to the survey.
The survey found more than 30 percent of IT leaders believe that technology standardization could help their company become more effective.
Dell interprets this as confirming that the use of accepted industry standards are a primary way to drive out the cost and inefficiencies that come with proprietary architectures. While the study highlights the need to remove IT waste from enterprises, it also suggests that CIOs should focus on changing the balance of IT spending. By investing significant resources in existing systems and silos, companies can get mired in day-to-day maintenance rather than diverting spend to new, innovative projects that can improve business performance. Dell believes the optimal ratio of spend for efficiency to be just 50 percent of IT budgets on day to day running of the business, in part, by standardizing IT infrastructures.
The study also found 40 percent of IT leaders see better IT project management as driving more efficient use of technology. The top three key factors driving a more effective use of technology are better IT project management, standardization of technology and better integration of existing applications
Dell found that better project management was one of the largest current concerns of CIOs and decision makers according to the LSE survey. The need for companies to invest in technology that shifts IT spend away from labor costs that lock companies into a "keeping the lights on" approach is a significant focus. Further, the research addresses the need for greater implementation of simplifying technologies that drive datacenter efficiency, which can inherently reduce risk while also unlocking resources that can drive innovation.
The survey found that enterprises are determined to improve productivity but this goal was not set in a way to reduce workforce size - cutting jobs ranked as last priority.
The unleashing of talent to invest in strategic opportunities is a key concern for CIOs globally, Dell said. The LSE survey discusses the increased recognition of CIOs in dividing IT into task-based "blue collar" tasks and strategic "white collar" opportunities. By leveraging technologies that automate processes such as cloud-based delivery models, to boost productivity and reduce manual interactionsenior IT decision makers are enabled to reallocate headcount from "blue collar" positions to "white collar" positions that can provide more value and innovation within the organization while also ensuring employees have an opportunity to grow their skills and knowledge. |
