Member Article

New report shows businesses failing to realise ROI from IT investments

According to new research, only one in four companies (25%) in EMEA meet the definition of a ‘Transformer’ – a company that describes its use of IT infrastructure to drive “innovation excellence.” The success of Transformer companies is supported by a number of metrics. For example:

• 70% of Transformers expect return on investment (ROI) on all or most new technology investments within two to three years compared to 57% of non‐Transformers. • 61% of new IT applications or services introduced in the last 12 months are described as a complete success for Transformers compared to 52% for non‐Transformers. • 29% of Transformers see more than three-quarters of projects as a success compared to 16% of non‐Transformers. • Transformers are more likely to have reviewed various aspects of their network or application infrastructure. 77% of Transformers have already completed or are currently implementing a datacentre consolidation or optimisation project versus 49% of non-Transformers.

These findings come from a survey of more than 1,000 IT decision makers at companies in multiple vertical sectors and across 10 regions in EMEA – UK, France, Germany, Spain, Italy, Switzerland, Benelux, Russia, Middle East, and South Africa. The survey was commissioned by Riverbed Technology and conducted by Loudhouse, an independent research company, in 2013, with the goal of better understanding how effectively businesses are embracing and optimising the value of new technologies. The full report is available here: “The Transformers: How to ensure ROI on innovation investments.”

Harnessing the Power of Change Is Not Automatic

“The speed of change in enterprise technologies over the last five years has been astonishing,” said Willem Hendrickx, senior vice president sales EMEA at Riverbed. “Social media, big data, mobility, and cloud computing have disrupted existing business models. Business leaders see these new technologies as a significant opportunity to innovate, improve efficiency, and provide differentiated customer experiences in highly competitive marketplaces. The challenge, however, is to ensure that repeated adoption of the ‘next big thing’ delivers maximum benefit and optimal value to the business. That is the question this study set out to answer.”

How to Ensure the Greatest ROI on Innovation Investments: Better IT Preparation

The study found that investment in new enterprise applications and technologies has dramatically increased across EMEA in the last two years. Eighty-two percent of IT decision makers say the proportion of their overall spend dedicated to new business-critical applications has increased. On average, 25% of IT budgets are now devoted to deploying new technologies or innovations, in particular cloud computing (59%), social media (45%) and mobile application development (44%).

The study also found, however, that whilst new applications offer the promise of improved business performance, for many organisations (44%), the new applications are failing to meet performance expectations, at a substantial cost to the company. The survey found that Transformers, on the other hand, are characterised not only by greater success in their major deployments of enterprise applications, but also through better preparation to ensure success, particularly of their IT infrastructure and aspects of its performance.

“The study identified a significant minority – Transformers – who are utilising technology effectively and transforming their investments into high business performance,” explained Willem Hendrickx. “Transformers recognise the importance of a high-performance network and application infrastructure to maximise the impact of applications and technology investments. These model companies are enjoying greater productivity across the business, and they also expect ROI to be realised in a shorter timescale.”

What Separates Transformers from Non-Transformers?

Transformers believe in the transformative power of technology: they are more likely to consider technology to be a driver of innovation (66%) than non‐Transformers (40%) and are more likely to have increased investment in business‐critical applications in the last two years (88%) compared to non‐Transformers (78%).

Transformers also understand that only if technology is optimised for today’s globally networked IT environment, can it fully deliver on its promises. For example, Transformers are more likely to have reviewed various aspects of network provisioning in the last 12 months including data centre (48% compared to 38%), hosting / outsourcing network management (51% compared to 38%), capacity (52% compared to 44%), and storage (56% compared to 47%). Transformers are also more likely to have already completed (36%) or be currently implementing a datacentre consolidation or optimisation project (41%) – compared to (15% and 34% for non‐Transformers, respectively).

This was posted in Bdaily's Members' News section by Riverbed Technology .