This is according to comprehensive new research from business advisory firm CEB (formerly known as Corporate Executive Board), which has extrapolated the IT implications of the changes for large businesses.
"Although austerity drives have led to a focus on process automation, this isn't producing the scale of improvements needed in employee productivity," warned Andrew Horne, U.K.-based managing director at CEB. After analyzing the results of a comprehensive cross-function study of enterprise working practices published late last year, CEB will issue a list of guidelines to member organizations over the coming weeks, advising them of urgent action they will need to take if they want to deliver significantly improved results.
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First, CIOs must reduce their focus on large enterprise ERP and CRM projects in favor of deploying more flexible and dynamic business intelligence, analytics, collaboration and mobility products which will more directly help transform the way users complete tasks.
"At the moment companies are spending on average around a third of their IT budgets in this area (then a third on large enterprise systems, and a further third on infrastructure)," Horne said. "Any organization spending less than this is seriously lagging, whilst those pushing hardest for improvements are allocating two-thirds of all IT spending to the tools that are really capable of transforming the way users work."
Collaboration tools for empowering knowledge workers to share ideas and easily locate the contacts and information they need should be particularly high on the agenda, Horne noted.
"One of the biggest surprises in our latest research is the growing impact of collaboration on productivity," he said. "People know that work is becoming more collaborative, but the surprise is that 50% of successful performance now depends on this -- where 10 years ago 80% of the outcome of any task would have been down to the individual. It is the magnitude of the shift that we didn't expect."
Other changes will have a more gradual impact over the next three to four years, but need to be planned now, he added. "Indeed, companies need to rethink their strategic planning altogether. The days of setting out annual strategic plans and budgets will soon be behind us," Horne said. "Things change so quickly now that organizations really need to be reviewing their plans quarterly, and ensuring they can adapt them if priorities have altered."
But the real wakeup call for CIOs during CEB's latest member survey has been their lack of visibility on what IT users need to do their jobs effectively. "When we asked 'Who in IT really understands the end users and how they get work done?' there was often an uncomfortable silence," Horne reported. "Someone needs to take responsibility for this, and find new ways to discover what users need from technology -- beyond asking their line managers, who are likely to be so removed from day-to-day activities that they aren't actually in the best position to judge this."
Then organizations need to look at how the designated tools will make a difference, Horne noted. This goes beyond the remit of IT, he suggested. "It may require the involvement of HR and other disciplines -- in the form of cross-functional support -- as users learn to work more collaboratively, sharing knowledge and ideas more readily, and replicating best practices."
Finally, as organizations strive to find the right balance between standardization and adaptability -- and adapt to the increasing consumerization of IT -- CEB proposes that companies approach IT in a layered way. This means separating the enabling architecture, including IT, security from the user interface, applications and data. "Some of this may be hosted in the cloud; also users will be able to find their own apps, which will simply plug in to the company infrastructure. IT will own the integration and the security, but will be much less focused on the interface to users," Horne said.
Fuller advice based on these themes will be issued to CEB's members in the weeks to follow. This latest analysis of the IT implications of changing work practices follows a major research program conducted by CEB late last year. This spanned functions including HR and sales and marketing, as well as IT, across 8,000 companies. The resulting report, "Breakthrough Performance in the New Work Environment: Identifying and Enabling the New High Performer," noted that executives are demanding 20% more productivity from their employees, yet that 55% of workers feel unable to handle the stress of their jobs for much longer.
More than any other department, IT has a crucial part to play in helping businesses meet this demand, CEB said.
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