One Third of UK Mid-Sized Companies Have No IT Strategy

A study conducted by market research firm Dynamic Markets has today revealed that technology is still not being seen as a strategic tool by UK mid-sized organisations and is simply being used in an ad hoc way to support the business.

With nearly one third (28%) of business managers stating that there is no IT strategy within their organisation and another third (29%) admitting to working to an informal loose plan whilst the final third (34%) just buying systems as they need them, it is little wonder that 35% of respondents said that their business growth was putting pressure on their existing IT infrastructure.

The research commissioned by Partners in IT, leaders in IT Service Management, and entitled “IT Service Management – Is It Worth the Money?” has unearthed some interesting correlations between mid-sized companies’ IT strategy and the knock-on effect this has for these organisations’ IT purchasing decisions when buying technology to support their business.

With only 18% of respondents having a formal IT plan which has been approved by the board and only 16% planning their IT investment on a 3-5 year timeline – in line with their current business plan – it may go some way to explaining why 55% of business managers in mid-sized companies believe that their IT set-up isn’t providing good value for money. With no tangible IT strategy in place, 85% of these organisations are not always buying best-in-class technology and, in 65% of the companies surveyed, the various IT systems (e.g. accounts, marketing, sales) are operating in isolation of each other.

“Having seen how few mid-sized companies had any form of IT strategy in place to support the business, I was not surprised to see the overall negative perception of business managers about their IT infrastructures,” said Paul Cash, MD of Partners in IT.

“For companies of this size, it is critical to be able to retain control of their IT spending and investment. And yet, the IT systems that are in place in many of these organisations due to a lack of IT strategies, have resulted in a staggering 68% of respondents not finding their IT costs predictable and 33% believing that the IT infrastructure costs are too much to maintain. As harsh as it may sound these companies may only have themselves to blame as they are not using IT as a strategic tool to help their businesses become successful. The launch of ITIL 3, however, gives companies an opportunity to refocus and consider a more strategic approach to their IT systems and how they will support their business.”

According to the research findings, it would also appear that this lack of strategic planning and buying also has an impact on the IT personnel that are being hired to work within these mid-sized companies in the UK, or the external consultants that are retained to work with them. When business managers were asked about the resources in terms of IT personnel that their company has access to:

• 66% admitted that they do not have the best that they can afford;

• 63% said that their IT people are simply not proactive;

• 35% also believe that their IT people are focused on technology for technology’s sake, rather than on getting technology to help drive the business.

“There is evidently a significant divide between what managers would like to see their IT systems and personnel bring to the business, and the benefits that are actually being delivered,” concluded Cash. “What we’re seeing in these results is a chicken-and-egg situation arising as, in 82% of the companies surveyed, managers are not actually producing service level agreements (SLAs) for the IT people to work to. In order for IT to truly deliver value to the bottom line of the business, its imperative for the organisation to get a handle on the technology in which its invested – both in terms of maintenance and management – and develop a concrete IT strategy to bring the company’s technology more in-line with the growth of the business now and long-term.”