(Source: Business Wire)
Businesses that continue to invest in IT are better positioned to weather the economic downturn, and will be better equipped to capitalize on any future economic recovery, according to a new survey of 300 European enterprise IT decision makers and research from the London School of Economics (LSE).
Results of the 2009 European IT Survey1, sponsored by BMC Software (NYSE:BMC), reveal that one in four companies -- the Thrivers -- are beating the recession by focusing on improving their IT organization's operational efficiency and reinvesting those cost savings into strategic IT projects that drive new business. Many of the surveyed CIOs highlighted their belief that sustained IT investment is strongly linked to overall business performance.
The survey also reflected interesting differences between the approaches to IT investment and innovation in the three countries. For example, German companies are the most consistent in their approach to innovation. They typically spend 24 percent of their IT budgets on innovation with a drop in spend of only 8 percent on average. In comparison, French companies are the most cautious; with innovation spend decreasing by 17 percent in the downturn. The UK has the most enthusiastic sentiment towards innovation, with 67 percent prioritizing innovation and 77 percent innovating in good and bad times.
"The lesson we can draw here is that companies cannot simply save their way back to recovery," said Dr. Alexander Grous of the Centre for Economic Performance (CEP) at the London School of Economics, who has studied the link between IT investment and business performance extensively. "Innovation deficits are extremely hard to redress. Organizations that recover best are those investing in areas of the business that can deliver long-term returns areas such as IT."
Key findings of the survey:
Consistent IT investment continues to deliver positive impact to business performance, according to the CIOs surveyed.
The 25 percent of companies categorized as Thrivers see the recession as a real opportunity.
60 percent state that investment in new technology drives business performance.
More than a year into the downturn, 77 percent of companies are already realising cost savings from IT.
64 percent recognise that IT investment can drive down costs in other parts of the business.
60 percent of companies that have realised cost savings are reinvesting in strategic IT projects.
Additional joint research by the LSE and global consultancy McKinsey showed that firms which combine strong, sustained IT investment with good management practices achieved superior bottom line performance in terms of productivity, profitability and sales growth.
"The message is really very simple," continued Dr. Grous.
