Lack of measurable return preventing investment in IT

Managed communication services provider Kcom, recently conducted a research study investigating UK organisations’ IT investment plans. It indicated that senior IT decision makers are struggling to justify IT investment because they can’t effectively demonstrate how it will support their business objectives.

The survey, which polled 1,000 senior IT decision makers from across the UK, reveals that a third (32.3%) of respondents increased their investment in IT over the last twelve months. However, as a sign of organisations becoming more shrewd, nearly three quarters of respondents will not, or have no immediate plans to, invest in IT solutions during the coming year.

Demonstrating value is vital: 26% of respondents cite the number one barrier to IT investment as the inability to demonstrate how the implementation of IT will meet the organisation’s business objectives and provide return on investment. Over a quarter of respondents (27%) also cite lack of board buy-in or the reallocation of strategic resources elsewhere in the organisation as a major reason as to why they aren’t making an investment in IT solutions, suggesting that CIOs are struggling to demonstrate the value of IT to other C-level executives.

Sally Fuller, Director of Strategic Propositions at Kcom comments: “This testing economic climate is putting even greater pressure on businesses to justify IT spend and it is understandable that without being able to demonstrate measurable return they are reticent to invest. Suppliers have an important role to play in helping identify organisational challenges that technology can help address as well as supporting companies with valuable evidence including accurate investment return calculations. Offering innovative outcome-based contract models is another way of clearly demonstrating meaningful return to all levels of the business, helping to overcome barriers to investment.”

Shift to the cloud not just hot air: Of the 28% who are planning to invest in new solutions, nearly half (46%) claim moving to the cloud is their main priority, showing that the hype surrounding the move to cloud is well founded. With IT budgets tight, cloud solutions are an obvious choice for investment, as they offer the potential to deliver more for less. Other areas for investment include managed services (18%), Unified Communications (13%), IP Convergence (13%) and contact solutions (10%).

Businesses coming out fighting: The study also reveals that those who are investing in other areas of the business are prioritising Sales and Marketing (36%) and R&D (29%), implying that companies are on the front foot by focusing on how to improve brand visibility and product quality with a view of increasing their market share.

“When organisations are focusing on investing in areas that drive business growth, such as Sales and Marketing, it is a clear call to action for the IT industry to ensure they are providing invaluable advice on selecting the technology that will support these areas and therefore the overall business strategy.”

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