Poor information flows holding back business

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As the green shoots of economic recovery start to push through the permafrost of the worst economic crisis in living memory, forward-looking companies are waking up to the fact that the time has come to reassess IT priorities.

In this post-recession world, limiting the role of IT to "just keeping the lights on" is no longer sustainable and a growing number of organisations of all sizes across multiple verticals are starting to evaluate more strategic IT investments.

Indeed, for many of these companies, such strategic refocusing is becoming imperative as existing systems increasingly come under pressure as business ramps up again.

Clive Longbottom, service director at independent analyst group Quocirca, pointed out that a widespread problem has been that technology projects have been put on hold for a couple of years and this has caused IT to become a major constraint to the business, rather than a facilitator and enabler.

This assessment was mirrored by new research conducted for global business software and services specialist Sage. The UK-headquartered company's February 2011 poll of mid-market companies found that IT purchasing strategy is being focused around the use of business management software to improve efficiency.

"The priorities for purchasing are focussed on improving back office processes – for example, order processing and on industry/vertical specific software tools. This could be because of the ongoing uncertainty of economic conditions which is driving a ‘sit tight' mentality," said Lindsay Boullin, commercial development manager for Sage.

"This is supported by anecdotal conversations with our customers, who aren't sure enough about the intentions of their own customers to have confidence in their own profit growth in the future. And this is possibly driving the conservative buying behaviour."

However, as organisations move beyond this sit tight holding position, attention is increasingly concentrated on which IT investments can deliver best business value.

Quocirca's Longbottom advises that this assessment should address the fundamental question of whether the technology will allow the business to do something it could not do before, or if it can enable the company to do something cheaper and/or at less risk.

He believes that the main criterion should be to ensure that the business priorities are understood and that any technical change is done to support those priorities – not because the technology is "sexy".

"Companies are now having to figure out where investment has to be made in order to remove the main constraints, and what money (if any) is then left to invest in building better enablement," Longbottom explained.

"Many are still going for tinkering; the canny are looking at rationalisation, consolidation and virtualisation, combined with SOA/web services as a preliminary set of steps towards cloud. Worries still persist and another economic dip will push IT back into the 'don't spend' bucket."