IT Infrastructure Plays Key Role in Competitive Advantage
January 19, 2015

Payal Chakravarty
IBM

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More than 70 percent of companies recognize that IT infrastructure plays an important role in enabling competitive advantage or optimizing revenue and profit. However, despite this recognition, only 22 percent have a well-defined enterprise IT infrastructure strategy, according to an IBM Institute for Business Value report, Continuing the IT Infrastructure Conversation: Why Building a Strong Foundation Requires More Than Technology.

The report reveals the need for an improved level of collaboration between IT and business leaders, who increasingly have a greater stake in the success of IT infrastructure.

“Today’s IT leaders are responsible for more than overseeing technology breakthroughs, but they are also integral to advising chief executives about the organization’s business strategy,” said Tom Rosamilia, SVP of IBM Systems & Technology Group and IBM Integrated Supply Chain. “With customer experience as a key competitive advantage, never before has the combination and integration of back office and front office strategies been more critical.”

Based on a survey of 750 CTOs, CIOs and other senior technology executives from a variety of industries and company sizes in 18 countries, the new report says that despite the potential for greater preparation to support a new era of workloads, few organizations are working in tandem with their line-of-business leaders on challenges relating to next-generation IT requirements.

The study highlights how today’s IT infrastructure dialogue between business and IT executives is about more than technology – it’s about the future of the business itself. IT organizations need to build stronger relationships with business leaders to capitalize on IT trends for competitive advantage and deliver the capabilities for business success, the report reveals.

However, the research suggests there is opportunity for new IT conversations to evolve. This will require organizations to consider not only future technologies, but also the current corporate culture and management systems that influence organizational decisions.

According to the IBV report, IT organizations can increase the value they provide to the business by repositioning the role of IT as a trusted advisor and a valued service provider, collaborating across the ecosystem and developing the right mix of skills and capabilities to meet changing IT infrastructure needs. The report suggests that organizations also need to rise to the challenge of developing the next generation of IT professionals that have developed new skills beyond traditional technology competencies. Companies should also address changing demographics and new technology requirements.

In 2014, IBM published the results of the first research into the topic of IT infrastructure. In that report, “The IT Infrastructure Conversation,” less than 10 percent of organizations said their existing IT infrastructure is fully prepared to meet the demands of mobile technology, social media, big data and cloud computing.

The earlier report identified two groups: “Strategic IT Connectors,” a small number of leading organizations already working in tandem with their line-of-business leaders on challenges related to the next generation of IT; and “Siloed IT Operators,” those organizations that lack strategic preparedness and connection to the business.

New IBV research reveals that 81 percent of Strategic IT Connectors recognize IT infrastructure plays an important role in enabling competitive advantage. This group is also more prepared to adjust to trends in the marketplace such as cloud, analytics, mobile and social – and more likely to identify themselves as outperforming their industry peers in terms of revenue growth and profitability.

According to the latest report, more than 40 percent of respondents said that business leaders will be involved in making decisions about cloud computing and IT architecture over the next three years. Yet, only 30 percent of organizations effectively collaborate with the business to provide IT infrastructure solutions to support their business needs.

Additionally, only 23 percent of those surveyed believe their organization is successful at collecting, analyzing and documenting performance measures. This lack of information on metrics and measurement makes it difficult to demonstrate the value of IT to an organization.

The new research uncovered that many CIOs recognize that in an environment where IT infrastructure is becoming more critical, their ability to manage the business of IT remains a work in progress. That is because they remain challenged in their ability to support a strategic IT infrastructure agenda.

Payal Chakravarty is Senior Product Manager for IBM Application Performance Management.

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