Why IT Must Get Back Into Growth Mode - InformationWeek

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6/24/2010
05:53 PM
Chris Murphy
Chris Murphy
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Why IT Must Get Back Into Growth Mode

Our research shows a clear uptick in growth-oriented IT projects. But after all the cost-cutting, CIOs must prove they left enough muscle to once again drive revenue and innovation.

Imagine you have just seven days to get to know your customers better. Seven days to understand their needs and wants and fine-tune your product for them. After those seven days, you've lost the chance to sell them more of what they would have loved to buy.

That's the challenge and opportunity Royal Caribbean International CIO Bill Martin has on several of the company's newest, tech-rich cruise ships.

Once guests are aboard certain ships, a small team on shore has begun running analytics on passenger demographics, combining those results with real-time sales activity on the ship. For instance, does a spa have open slots? Royal Caribbean can promote those on in-room interactive TVs to only those guests most likely to take up the offer.

Martin is sending a clear message from the high seas: Opportunity for higher revenue is out there, and IT is going to help drive it. "We see growth coming back," he says, and from around the world, not just North America.

No one's calling a blockbuster economic recovery. But we surveyed 333 top IT leaders, either C-level or VP, and found a marked increase in optimism compared with a year ago.

Last year, just 18% of the senior IT execs we surveyed thought "introducing an IT-led product or service" would be a main area of IT innovation. This year, twice as many respondents, 36%, see things that way--the second most-cited area of innovation, after making business processes more efficient. Cost cutting, meanwhile, has fallen--32% now consider that a top innovation priority, down from 40% last year.

Are CIOs in a position to deliver growth? That's the biggest concern CIOs in our survey have--that their organizations can't execute fast enough to meet business needs. IT leaders did their part during the cost cutting, reducing staff and consolidating IT infrastructure. Did they leave enough muscle to respond to growth opportunities?

There's one other risk: missing the growth opportunity entirely. Look at the survey numbers another way and you see that most business technology leaders still aren't using IT to drive revenue and new products. IT tends to be most comfortable making business processes more efficient rather than driving sales and creating new products and working with customers. But with the pressure back on companies to grow, IT needs to do its part.

Although it's not raining money for IT projects, the budget slashing of the past 18 months has eased. Half of the business technology leaders we surveyed see their budgets rising this year, with more than a third of them seeing increases of 5% or more. Just under one-fourth see IT budgets decreasing.

InformationWeek:June 28, 2010 Issue To read the rest of the article, download a free PDF of InformationWeek magazine
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