Accenture Survey of Information Technology Executives Finds Improving Service Vies with Cost Reduction as Top Challenge

Accenture believes the focus on improving information technology services levels is a natural progression from the cost cutting imposed on IT departments over the past five years, and provides a positive outlook for technology being increasingly viewed as an enabler of business growth rather than merely a cost of doing business.

“This research study shows that while many organizations made massive IT investments in the late 90s, followed by a period of rationalization and consolidation, we are now on the brink of yet another cycle of IT investment focused on initiatives to grow and differentiate businesses,” said John Kaltenmark, global managing director, Accenture Infrastructure Consulting. “The research highlights the demands that business is making on IT for greater value creation. To solve these issues, organizations are now examining practices that link technology resources and business objectives such as business services management (BSM).”

The survey asked respondents for their top five technology challenges for the year, and the individual country findings revealed some interesting similarities and variations.

Respondents were also asked about their top day-to-day information technology priorities. The survey revealed that U.K., French and German companies have the greatest confidence in their data protection and security operations when compared to their Italian, U.S. and Japanese counterparts, who cite it as a top five challenge for 2006. However, IT spend in this area is still a priority for all but Japanese respondents, who did not cite security as a top priority for their companies.

“It is not surprising that managing risk and securing assets remain high on most IT executives’ priority lists around the world,” said Alastair MacWillson, head of Accenture’s Security practice. “As threats from both outside and inside the organization continue to proliferate, and new vulnerabilities are uncovered, organizations are realizing that to achieve high performance, security must be embedded in every part of their business — not just bolted on.”

Other Key Findings

• IT Strategies: In the United States, more than 80 percent of IT executives continue to be equally focused on reducing cost, on improving IT performance, and on using IT to enable business growth rather than view it merely as a cost to the business. Less than 20 percent use IT to drive innovation in their enterprise. In the United Kingdom, however, a majority of respondents are geared towards viewing IT as an enabler of business growth, while in Japan respondents are mostly focused on reducing IT cost. France and Germany are focused on improving their IT performance in the short term. In the mid term however — one to three years — the United States, United Kingdom, France and Italy will mostly focus on leveraging IT as an enabler of business growth and innovation.

• IT Budgets : With 40 percent of respondents from all the countries revealing that overall IT budgets increased since 2005, this was a trend lead by France with 70 percent of respondents reporting an average budget increase of 14 percent. Globally, 20 percent of respondents indicated they were experiencing a budget decrease from 2005, and 40 percent experiencing no change to their budgets. Individual countries, however, showed marked differences in contrast to the French market. Among German respondents only 25 percent reported budget increases, although the average size of their increases was larger than those reported by French respondents (17.8 percent in Germany compared to 14 percent in France).

• Virtualization: Technology for optimising data storage, server utilisation and network management, known as virtualization, has been around for a number of years. However, the research shows that U.S. organisations have been more inclined to adopt virtualization than their European or Japanese counterparts, who seem more hesitant in the near term. The response from U.S. organisations shows they are more open to experiment and have benefited from a greater availability of products to experiment with. Accenture is seeing new virtualization technologies which allow for further consolidation of complex environments (servers), as well as the focus on compliance (storage), and the desire to enable mobile/remote workers (network) will be driving further adoption around the world in the mid term, particularly in some Asian countries where we may see a leap-frog effect take place.

“CIOs and their teams are in the business of building a high performance IT Infrastructure foundation on which to run their business processes and applications,” Kaltenmark said. “The increased investments in new technologies such as automation and service-oriented architecture, as well increased focus on risk management, cost optimization and innovation, means that CIOs are being encouraged to show how IT can drive measurable business value, innovation and growth. IT is being brought out of the backroom and into the boardroom.”