Innovation could generate additional profits of £5.4bn

Technology could generate $10bn (£5.4bn) of new profitability for Global 2000 companies by 2015, according to analyst firm Gartner.

The Gartner Scenario 2005: IT Leaders’ Next Big Decisions report says extra revenue will be derived from chief information officers (CIOs) using technology differently and more innovatively.

Gartner has identified 20 emerging business trends that could generate significant profits for large companies, including globalised micro-businesses (where small companies use the internet to do business with global corporations), effective use of technology instigated to meet compliance issues, and an increased penetration of IT into non technology-related business roles.

IT and business will continue to fuse over the remainder of 2005, according to the report.

‘CIOs and IT are transforming, from internally focused departments and cost containment to supporting growth and, increasingly, innovation,’ it says.

To make the most of this potential, the CIO must operate in one of two ways: either as a service provider for the business or as an active contributor to the way a company makes profits from innovation.

‘This is a fence that no CIO will be able to sit on for much longer,’ said Gartner senior analyst Mark Raskino.

‘If you’re not clear what you’re focusing on, then you can’t do your job well. Contributing means stepping forward and taking risks, bringing ideas to the table and laying out plans. The other option is to be a service supplier, someone who gets IT functions done as quickly, cheaply and effectively as possible.’

But Raskino says taking the service provision route is by no means the easy option.

‘To be purely a service supplier requires huge focus because all these functions are increasingly being moved to outsourcers – third-party providers who are able to do service jobs globally and deliver economies of scale. To be a servicer and contributor is very difficult indeed.’