InformationWeek 500: A Year Of Relentless Innovation

The World Isn't Getting Flatter

As we saw last year, the great globalization of IT seems to have peaked. After booming from 2004 to 2006, offshore IT outsourcing leveled off the past couple of years, even among the largest companies. This year, 59% of InformationWeek 500 companies with more than $500 million in revenue do IT outsourcing with vendors outside the United States. Offshore business process outsourcing also is leveling off, with 37% of companies with more than $500 million saying they do it. Last year, 40% said they did offshore BPO. InformationWeek 500 companies may be doing more total business with offshore outsourcers, however.

And globalization remains central to the IT operations of many companies. Four of 10 companies say they're making global support and development a regular part of most IT jobs, and 38% say they're integrating more IT workers with global business operations such as purchasing and supply chain.

There are sharp divisions on two other high-level questions: Does your CIO wear more than the IT hat at your company? Who does the CIO report to? Forty-eight percent of CIOs at InformationWeek 500 companies don't have executive responsibility for an area outside of IT; the rest do, including 16% in charge of innovation. Forty-one percent of CIOs report to the CEO or president, 23% report to the CFO, and the rest to other executives.

Which technologies and strategies are yielding productivity gains? Collaboration and analytics software are cited most often among 14 choices. Almost six of 10 respondents to our questionnaire pick deploying collaboration software as a top productivity driver, while 46% cite deploying business intelligence tools. The next biggest driver, cited by a quarter of respondents, is more support for telecommuters and remote workers.

Almost as interesting is what doesn't make most IT leaders' lists of productivity boosters. Distributing smartphones is cited by just 12% of InformationWeek 500 companies. This finding suggests that smartphones, despite their consumer reach, remain a niche business tool--and makes innovators like Coca-Cola Enterprises look all the more impressive. The bottling company has been testing smartphones to deliver information to route drivers and other in-store employees. Beyond that, it has charted a broad enterprise mobility strategy, including making any application it mobilizes device-independent to avoid the inefficiency of repeated one-off projects. Perhaps mobile application development is the next frontier for many companies--just 15% cite it as a top productivity driver this year.

On the other end of the adoption spectrum are wikis and blogs, which we can stop calling emerging technology now that 78% of InformationWeek 500 companies use them to communicate with colleagues. That's fast uptake--two years ago, just over half used them internally. Only 42% of companies use wikis or blogs to collaborate with customers or suppliers, but that's up from 27% two years ago.

Web 2.0 Crackdown

Even as wikis go mainstream, the flicker of enthusiasm for letting employees use consumer apps, lit by Web 2.0 apps, may be burning out. Two years ago, a third of InformationWeek 500 companies encouraged consumer app use; now it's dipped to a fourth. Anecdotally, we're hearing about crackdowns on consumer Web apps, foremost Facebook and Twitter.

It's possible that's because the functionality people demanded--online collaboration, instant messaging, video interaction--is now available in enterprise software. More likely, enterprise use of consumer apps and other technologies has become so widespread that companies don't need to give it a nudge. Adoption among InformationWeek 500 companies of hosted apps such as calendars and spreadsheets stayed about the same, at 62%, and the use of mashups using enterprise data rose only slightly, to 42%.

No industry or geography dominates the InformationWeek 500. Manufacturing's the largest segment, at 11% of the group, followed by financial services, healthcare, and consulting and business services, each with 10%. Banks are the biggest IT spenders, and geographically, companies in the Northeast spend the most, 3.2% of revenue on average, compared with 2.3% in the South.

It's been brutal out there. This economy offered every excuse for an IT team to put real innovation on ice--just until things get a bit better. For those that didn't, here's to you.

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Selection Of The InformationWeek 500