Business & Finance
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2/25/2005
11:15 AM
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Tech Investments Take Time To Thrive

Regardless of how you look at it--collectively or by revenue--companies generally are optimistic about revenue growth and business prospects in 2005. But does that translate into increased technology investment?

A typical company with annual revenue of $1.56 billion will invest 8% of revenue on IT products and services this year, according to InformationWeek Research's Outlook 2005 survey. That's an average of $125 million. Of the 300 business-technology managers interviewed for our Outlook study, more than half feel optimistic about the future based on their companies' commitment to IT initiatives planned for the first quarter.

chart -- Payback TimeframeThere's no universal formula to ensure the success of IT investments. Implementing standard frameworks such as Balanced Scorecard, IT Infrastructure Library, and Six Sigma provides workable guidelines for making business processes more efficient.

Yet companies are optimizing their technology assets to help achieve greater top-line revenue and bottom-line profits. In fact, 80% of business-technology managers surveyed intend to drive growth by simplifying business processes. Improving security procedures, providing tools and services that enhance productivity, establishing real-time information processes, and improving the usability of business apps and software quality are priorities.

Another objective: gaining better return on IT capital investments. Companies generally don't expect immediate returns from tech initiatives. Most respondents expect payback from IT projects in one to two years.

If your company has achieved an IT windfall in the past 12 months and has annual revenue of $500 million or more, nominate it for this year's InformationWeek 500 study at iw500@cmp.com.

Helen D'Antoni,
Senior Editor, Research
hdantoni@cmp.com


chartRisk Assessed
Does your company have a consistent framework for assessing the business risk of IT projects and initiatives?

Besides establishing payback tipping points for IT projects, companies in InformationWeek Research's Outlook 2005 study also are taking steps to understand the potential hazards of IT initiatives. For many, it's a standardized procedure. Three in five of the 300 sites surveyed have a consistent framework for assessing the business risk of IT endeavors.


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