Return on investment cited as number one reason for decrease in investment
Although two-thirds of UK boards make room for a chief information officer (CIO), disagreements over the reliability of information and communications technology (ICT) projects reign, according to the annual Telewest Business ICT spend survey, conducted by the Economist Intelligence Unit.
This continued rift is affecting investments in technology with just 43 per cent of senior executives planning to boost ICT budgets in 2005, compared to 58 per cent in the previous 12 months, the survey found.
Directors see value in ICT but want to see more measurable return on investment. Twelve per cent of UK executives and a quarter of business managers do not think that their ICT networks are cost-effective, with only one in every five (19 per cent) viewing their ICT programmes as “excellent”. Almost all (91 per cent) of respondents believe their companies should require budgetary justification prior to any IT spend.
One quarter of all CEOs believe business executives within their organisation need to better understand technology. A great number of CEOs (38 per cent) also believe that ICT in turn needs to understand how business works better. Interestingly, half of all CEOs said that they have or would like to have access to mobile working solutions to help them with their hectic working lives that often involves multiple sites. However, only 35 per cent of CIOs made this a top priority.
“Business and technology executives are still having trouble agreeing on the success of ICT projects, but investments need to be made to maintain competitive edge,” said John Cunningham , Director of Business Services, Telewest Business. Two thirds (63 per cent) of CEOs feel that technology usually underperforms against expectations while almost the same number (61 per cent) of IT experts, the CIOs, disagree.
“There’s a long way to go to consolidate the two parties, but something that they can agree on is that ICT is instrumental in improving customer service, a key driver for investment, and that outsourcing is an option seriously worth examining,” he continued.
Of the findings, Gareth Lofthouse for the Economist Intelligence Unit commented, “CEOs are aware of the benefits of technology. Naturally, CEOs and CFOs want to see plausible evidence that their investments are increasing productivity and, ultimately, profitability.”
Other key findings include:
o 80 per cent of respondents cited improving customer relationships as their top priority, with 68 per cent seeing ICT as important to achieve this goal
o Nearly two-thirds (60 per cent) of directors see ICT as important as a means to lowering costs and maximising efficiencies
o Only one-fifth (20 per cent) see ICT as a way to accelerate time to market
o Companies plan to boost outsourcing budgets in the next year
Telewest Business’ John Cunningham said that the move towards managed services reflected a growing trend. “Companies are looking to take advantage of areas of ICT where they may not have the skills in house to implement by looking to outside service providers. As the pressure to find skilled staff grows so this trend will continue,” he concluded.
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About Telewest Broadband:
Telewest Broadband, the broadband communications and media group, currently passes 4.9 million homes and provides multi-channel television, telephone and internet services to 1.74 million UK households, and voice and data telecommunications services to around 67, 000 business customers. Its content division, Flextech, is the BBC's partner in UKTV. Together they are the largest supplier of basic channels to the UK pay-TV market with a portfolio that combines wholly owned and managed channels, including the fourteen joint venture channels with the BBC. For further information go to www.telewest.co.uk/media
In May 2004, Telewest Business was awarded the Communications Management Association (CMA) Chairman's Award for exceptional Customer Satisfaction ratings in the Wireline Services and Internet/Online Services sections of the CMA's “Communications Market UK 2003” report. More information can be found at www.telewest.co.uk/business
For further information:
Telewest Business press contacts:
Rebecca Tyrer, Press Office
T: 01483 584227
Paul Allen, Rainier PR
T: 020 7474 6570
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