"This survey clearly shows that European CFOs feel their companies aren't getting enough ROI from their IT spending and are also frustrated with not getting the key insights from IT that enable maximizing business performance, given what they are spending," said
The vast majority of European finance executives have embraced IT as a potential driver of profits, according to the survey, and 30% of respondents see the primary function of IT as improving operating profits. And the evidence would suggest that they are right. In fact, an AlixPartners analysis included as part of the study demonstrates that executives from nearly half (45%) of companies with rising margins over the past three years said in response to the survey that their access to management information matches or exceeds expectations, versus only 21% from companies with flat or falling margins.
European finance executives are still focusing their investments on systems, rather than growth-oriented IT. Sixty percent of survey respondents say that they have been successful in implementing IT projects aimed at improving their businesses' financial returns. With the rapid rise of social networks, the emergence of dynamic online and mobile channels, an avalanche of business data and the distribution of computing power through the cloud, growth-driving "improve-the-business" technologies contain real promise, suggests the study.
In order to improve IT investments, European finance executives agree that process problems have to be fixed. Weaknesses in the planning and budgeting process often undermine the effectiveness of their plans and 44% of respondents say that factors such as politics and personal persistence influence their decision-making.
The problem seems to come partially from a lack of analytical skills, since 54% of respondents admit that their teams lack the specific competencies needed to help drive their businesses forward.
European CFOs and their teams might also benefit from benchmarking U.S. practices, suggests the study. "With European finance leaders so focused on investments in 'keep-it-running' IT, they may not have turned their attention to the need to optimise their 'improve-the-business' project portfolio. By aggressively driving down the former type of IT costs, CFOs can create a bigger investment pot and apply rigorous portfolio-management techniques to get the most business benefit from growth-oriented IT," said
About the Study
The study, IT Spending and Return: A European Perspective, is the result of a collaboration between AlixPartners and Oxford Economics. In late 2013, Oxford Economics surveyed 50 executives across four European countries:
About Oxford Economics
Oxford Economics was founded in 1981 as a joint venture with
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