Where The Top Innovators Are Spending Their Money

In business, the "rearview mirror is always clearer than the windshield," to quote Warren Buffet. Yet finding quantitative information that permits the benchmarking of business-technology initiatives and tech-spending plans is a challenge.

For the past 16 years, InformationWeek has delved into the business-technology best practices of some of the nation's top companies with its InformationWeek 500 study. Using this data, you can compare your company's initiatives against the top practitioners of business technology.

So, where did this year's most-innovative companies put their IT dollars? As in 2002 and 2003, study participants pumped the majority of their IT funds into staff salaries and benefits. InformationWeek 500 companies spent on average 33.5% of their annual IT budgets--or $111.9 million--compensating workers. This was followed by spending on applications ($66.2 million), hardware ($55.1 million), IT services ($46.4 million), and research and development ($10.9 million). In total, a typical company in this year's survey allocates $334 million to business-technology.

Technology is generally focused on building productivity and providing a secure work environment. Storage area networks, intrusion-detection software, data warehousing, and business-intelligence tools top the technologies that participating companies are deploying.

Optimization of technology processes also was a key area of emphasis. Seventy-nine percent of respondents have increased their use of automation; three-quarters have defined business processes more clearly; three-quarters have reengineered IT infrastructure; and nearly three-quarters have established enterprise-technology standards.

Read more about this year's InformationWeek 500 at informationweek.com/500. To learn more about the 2005 study, E-mail us at [email protected].

Kathy Foley
Managing Editor, InformationWeek 500
[email protected]

Top Technology

Which products or technologies are widely deployed at your company?

Content-filtering and anti-spam software are popular with InformationWeek 500 companies, with 96% saying the software is widely deployed at their companies. The average annual cost of spam per employee is $1,934, according to Nucleus Research. Average lost productivity annually per employee is 3.1%.

Taking Ownership

Has your company patented, trademarked, or copyrighted any IT-driven processes, products or services in the past 12 months?

When it comes to protecting technology assets, the top fifth of InformationWeek 500 companies are in the lead. Sixty-five percent of the top 100 have patented, trademarked, or copyrighted IT-driven processes, products, or services, compared with nearly a quarter of the remaining companies on the list. Collectively, 35% of the companies from the 21 industries that make up the InformationWeek 500 report patenting, trademarking, or copyrighting an IT process in the past 12 months.

Efficiency Vs. Innovation

Did your IT organization invest more time in the past year creating business-process efficiencies or creating business innovations?

On the business side, almost half of the InformationWeek 500 survey respondents give equal importance to business-process efficiencies and business innovation, with 46% saying they invest about the same amount of time in both endeavors. Almost the same number, 43%, say they spend more time creating business-process efficiencies, while 11% focus on business innovation.

Optimize Now

What steps has your company taken to optimize the efficiency of technology processes in the past 12 months?

Venturing out of one's office no longer equates to unproductive work hours or lost time. InformationWeek 500 companies are showing leadership in the deployment of mobile applications. Sixty-three percent of this year's IT innovators have increased the mobile capacity of their applications through connections to PDAs, cell phones, and laptops.