Canadian firms see direct link between IT investment and business success

A vast majority of executives in large Canadian companies agree IT investment is essential to business success, but many remain skeptical about technology’s impact on providing competitive advantage, according to a recent survey by Harris/Decima and IT Business.

This “disconnect” could be an indication that companies across the board lack a reliable means of measuring the successful performance of key IT deployments, said Lise Dellazizzo, vice-president of the Ottawa-based marketing research firm.

Some 385 business executives of large, medium and small organizations from across Canada were questioned about their views on IT investments by Harris/Decima.

The survey, launched earlier this year, was fielded by Harris/Decima, with questions developed by IT Business.

For survey findings on the relationships between IT and business organizations, view the article titled: Canadian IT departments must communicate their value to business managers.

Survey results showed more than 81 per cent of large businesses (companies with 500 or more employees) agree that their major IT investments were essential to their current success. About 78 per cent of medium-sized firms (companies with 100 to 499 employees) and 53 per cent of small companies (less than 100 employees) likewise say IT investments were essential to their current success.

However, when asked if major IT investments have made their business competitive, respondents were much less likely to agree.

Only 68 per cent of those surveyed in large companies, 50 per cent of medium-sized firms and 44 per cent of small businesses agree with the statement.

While the survey yielded only single results from those who disagreed with the assertion, overall 29 per cent of the respondents say they neither agreed nor disagreed with the statement.

“This indicates a large number of companies are ambivalent and that’s not good,” Dellazizzo said.

“It could point to the fact that IT’s impact is not being efficiently measured.”

There is a need for accurate measuring metrics that will help businesses monitor and measure the performance of IT investments in such areas as sales and marketing, she added.

Organizations that are unsure about the impact of their technology investments are hampered from developing effective IT strategies.

Technology vendors, Dellazizzo said, should take these results as a sign that they need to improve their marketing efforts towards small/medium businesses (SMBs).

“Most large vendors have moved their products downstream, but a lot still has to be done by way of explaining to smaller organizations how technology can benefit their business,” she said.

For instance, 81 per cent of respondents from large companies say major IT investments have made their business more efficient, compared with 70 per cent of those from medium-sized companies and 66 per cent from small business.

Asked if major IT investments have made their organization more productive – 77 per cent of those from large business, 69 per cent from medium-sized firms and 60 per cent from small companies agree.

More than 68 per cent of those from large companies, 68 per cent from medium-sized companies and 48 per cent from small business agree major IT deployments have demonstrated a proven return on investment.

According to Dellazizzo, small companies typically focus IT investments on achieving operational efficiency, while medium firms use IT for efficiency and success, and big businesses view technology primarily for success.

There appears to be a paradox between how SMBs view technology and their investment decisions, according to Doug Cooper immediate past chairman of the Information Technology Association of Canada (ITAC) and country manager for Intel Canada.

He said a large number of SMBs believe IT investments are essential to success, but they also see tactical productivity and efficiency issues as greater priorities over strategic technology investment.

“If given a choice between fixing a truck to deliver their goods and purchasing some software product, in most cases the money goes to the truck,” Cooper said.

He said one of the key hurdles for SMBs is the lack of trained staff and the difficulty of seeing any IT-related quantifiable benefit and ROI.

While large corporations can afford to take a long-term view of IT investments, Delazizzo said, SMBs because of their size and budget constraints have to remain tactical and practical.

“It appears the basic premise among smaller organizations is that if it’s (IT investment) not hitting the bottom line, value is not being realized”.

Overall the belief regarding the impact of major IT investments for a company’s prospects was positive, she said.

More than 58 per cent of respondents from small companies, 77 per cent from medium-sized firms and 77 per cent from large companies agreed that their major IT investments positioned their company for future success.

Comment: edit@itworldcanada.com

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