An Insight Research Report
Fixing The Disconnect Between IT and Business
A staggering 83% of IT teams think ways of working have permanently changed, yet at complete odds with the rest of the wider business, 61% of organisations believe working practices will eventually return to normal. This growing disconnect is a reflection of IT’s role within the business, further supported by Insight’s discovery that 72% of organisations treat IT as a utility instead of a business enabler, with only 22% giving IT a seat on the board. If IT continues to be treated in this way, organisations could be on course for strategic failure, with a demoralised IT team who don’t feel their work is valued. Seeing IT as ‘just a delivery’ function, and not having someone on the board who understands the digital landscape, is a significant competitive disadvantage. With bodies such as ENISA showing cyber risks increasing, organisations need IT leaders who can balance managing costs, security, and innovation, while also focusing on change management. IT needs to operate with the support of the entire organisation, or it will not be able to help the enterprise transform and evolve as it faces new challenges.
comes to digital transformation and investing in long-term projects, research from Insight has discovered.
T
here is a growing disconnect between IT departments and the wider business when it
Part one
With 550 senior IT decision makers, half in enterprises with 500-1,000 employees and half in enterprises with 1,000+ employees, from the UK, France, DACH, Italy, Spain, Belgium and the Netherlands, surveyed for this special report you’ll discover:
With the Covid-19 pandemic shining a light on the disconnect between IT and the wider businesses, organisations must take a series of steps to ensure they not only continue to build business resilience, but have the means to innovate to ensure digital transformation remains top of the agenda.
Are Businesses Investing for Operational and Workforce Optimisation?
What’s the Role of IT?
How to Plan your Cost Optimisation Journey and Transform your Business.
Access Insight's Research Report: Fixing the Disconnect Between IT and Business
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Part One: Are Businesses Investing for Operational and Workforce Optimisation?
These short-term projects could, for example, be intended to maximise the use of resources, or to adopt completely new technology that will increase efficiency. Whatever their goal, it’s essential that organisations take a planned approach, from procuring technology in the right way to adopting it effectively. Every project creates change – change that must be managed. Change management is often overlooked but without it, organisations will see wasted investments, spiralling costs and ultimately project failure. Getting buy-in at all levels is critical to change management, helping address employee resistance and ensuring project success. A planned and managed approach to change, together with the right skills and ownership levels, will be equally important for long-term projects. However, even before organisations start identifying projects and managing change there has to be agreement between the business and IT on future vision, direction and strategy. For instance, our research showed there is a question over whether the changes forced by the pandemic are permanent. IT decision makers certainly think so. 83% believe we are in a “new normal”, where ways of working have permanently transformed. However, does the wider business agree?
(Fig. 2).
55
%
organisations cancelling long-term IT projects that would help optimise the business.
organisations implementing projects that create short-term cost savings.
24
Long and short-term planning.
Fig. 1.
The pandemic has transformed many enterprises’ operations. The shift to remote working, together with adapting to rapidly changing markets, means that the most effective and efficient way for employees and the business to operate has changed. This means that, while enterprises have had to react immediately to the pandemic in order to optimise costs, they cannot ignore the long-term need to optimise and digitalise business processes through the use of technology. At present, 55% have invested in projects that will create short-term cost savings. And only 24% have cancelled longer-term projects – such as ERP upgrades, infrastructure upgrades and business transformation – that would help optimise the business but do not help in the short term.
(Fig. 1).
of IT decision makers believe ways of working have permanently transformed.
83
Optimising for the future?
If ways of working have transformed, then ensuring the employee experience, and business operations as a whole, adapt to these changes needs to be a priority for enterprises. Otherwise they run a real risk of finding it harder and harder to operate and compete with more agile competitors. At present, 67% of organisations are implementing projects that will improve the employee experience. Yet at the same time, 61% of respondents say the wider business is reluctant to invest in projects that could improve the employee experience because they believe things will eventually return to a pre-Covid-19 “normal”. The same is true for projects that will optimise the business. 55% are implementing them, but again 60% of respondents say the wider business is reluctant to invest because they believe things will eventually return to “normal”. You could argue that reluctant investment is better than no investment at all. However, if the business doesn’t buy into a project, it is much more likely to fail. A project that fails because of a lack of buy-in will still have wasted company resources, and may leave the enterprise in a worse situation than beforehand. Whether looking at employee experience or business optimisation, the belief that the changes driven by the pandemic are only temporary represents a clear disconnect between IT and the wider business, and one that can have severe consequences for the future of the organisation. Unless it’s addressed, there is a real risk that enterprises will continue investing in projects without believing in their end goals, or even base their strategy on completely inaccurate assumptions.
There are suggestions that this disconnect is already affecting organisations’ priorities. For instance, if organisations believe that things won’t change permanently, there’s less incentive to understand the impact of increased remote working on employees. While improving efficiency might still produce short-term benefits, longer-term projects to improve effectiveness won’t be needed. Currently, more enterprises have either investigated or are planning to investigate changes to employee efficiency caused by remote working, compared to changes to employee effectiveness. Suppose IT teams are correct, and ways of working have permanently changed. In that case, understanding how to maximise resources, bolster security and bring effective governance and compliance to the remote workforce will be a critical advantage. Those organisations that don’t understand how to ensure employee effectiveness will struggle to catch up with better prepared competitors.
Planning ahead
(Fig. 3).
Have organisations investigated the impact of increased remote working?
Fig. 3.
Plan to investigate
Have investigated
55%
44%
Impact on employee efficiency.
Impact on employee effectiveness.
43%
33%
The need for skills and technology.
Fig. 4.
Similarly, if organisations need to adapt to new ways of working, then investing in the skills and technologies needed to optimise the business and support a remote workforce will be critical. The majority of IT departments say they need to invest more in these areas. Again, if the wider business’s beliefs are holding up investment, it could prove to be a costly mistake if IT teams are proved correct. Addressing and closing the disconnect between IT and the wider business needs to be a priority. But first, organisations need to understand where it stems from.
(Fig. 4).
of organisations need to invest more in the skills and technology needed to support and optimise a remote workforce.
57
of organisations need to invest more in the skills and technology needed to optimise the business.
60
Part two
Part Two: The Role of IT
The disconnect between IT and the wider business stems from more than different opinions on how deeply the pandemic has affected working practices. It has its roots in how the business views IT and its role. For instance, IT can be seen as a business enabler: a strategic asset which drives value, enables new ways of working, and opens up new revenue streams through innovation. Alternatively, IT can be seen as a utility: a cost centre that provides an essential function for the organisation, but is not a strategic asset. At present, almost three quarters of organisations treat IT as a utility.
(Fig. 5).
of organisations treat IT as a utility rather than a business enabler, and only 22% give IT a boardroom seat.
72
One sign that IT is being treated as an enabler is a seat on the board. However, despite representation increasing since the beginning of the pandemic, at present only 22% of organisations give IT a boardroom seat. In most organisations, IT has to report into one or more of Operations, Administration, Production or Finance, limiting its ability to make its voice heard.
(Fig. 6).
Who does IT report to, pre- and post-Covid-19.
Fig. 6.
Marketing / sales
The CIO is a boardroom position
Production
Finance
Administration
Operations
12% 16% 27% 31% 34% 47%
16% 22% 29% 28% 38% 43%
Before Covid-19 outbreak.
After Covid-19 outbreak.
IT’s common image as a utility means that, while it is trusted to support important projects and receives substantial investment, it cannot support the business to its full potential. For instance, 82% of IT teams are engaged by the business to support business projects, and 81% have the freedom to invest in the skills they need. Yet 57% believe they are prevented from offering more to the organisation because they aren’t seen as a business enabler, and 59% are not measured against business KPIs. Historically, the failure to recognise IT as a business enabler; give it a seat on the board; and measure it against business KPIs has probably contributed to the £3.81m / €4.19m spend since 2018 on projects that either did not provide the full benefits, or failed. Over the longer term, failing to see IT as a business enabler will prevent enterprises from taking important steps forward. For example, how will the business know that technology developments will soon see their industry transformed? Consider the traditional retailers that have been driven to bankruptcy in 2020. Many failed to invest in the technology and business models that would have seen them introduce slick ecommerce operations. Similarly in manufacturing and every other sector, those that have invested in technology are succeeding. Hence, it’s fair to assume organisations that do not give IT a voice at the top table are going to find it harder to compete. In fact, this research already shows organisations are failing to take advantage of new technologies.
(Fig. 7).
Factors preventing adoption of new technologies
Fig. 7.
of organisations failing to take advantage of new technologies because of an inability to adapt to change or legacy technology.
of organisations failing to take advantage of new technologies because they aren’t listening to IT.
Technologies such as automation can provide huge benefits to enterprises. Making processes more efficient and repeatable can reduce costs while increasing reliability and performance; which is essential for organisations seeking to optimise their operations. However, out of the potential new technologies on offer, only 5G and the Internet of Things currently have many enterprises planning to invest. Regardless of which new technologies enterprises invest in, the right approach is crucial. This means procuring technology in a way that ensures it fits the organisation’s needs without unnecessary costs. It also means putting in place multi-stage plans to ensure adoption and strategies to maximise the value the technology can bring to the business.
(Fig. 8).
Organisations planning to invest in technologies in the next 12 months.
Fig. 8.
Immersive technologies
Deep learning
Machine Learning
Edge computing
Virtual assistants
Automation
Internet of Things
5G
30% 35% 40% 41% 42% 43% 51% 58%
Conclusion
IT is essential to every business, but its role within the enterprise is vital. If it is not seen as a business enabler, it cannot guide the business towards maximising the value of technology and accelerating digital transformation. Without this guidance, organisations will continue to miss out on the advantages of new technologies; and waste money on IT projects that IT could have warned against. While IT is seen as a valuable resource, the majority of organisations need to begin seeing IT as more than a utility. This means:
Giving IT teams more power to drive strategy, ideally through a voice on the board.
Letting IT use this voice to help the organisation innovate and differentiate using technology, putting in place programmes to ensure the enterprise uses data to uncover meaningful insights that will help the business.
Engaging with IT more, ensuring that it has a say on strategy and is consulted on what approaches will best meet the business’s objectives.
Trusting IT teams to identify and resolve longer-term issues, with results measured against business KPIs.
For instance, many IT teams are tasked with reducing costs and improving governance. Advisory firm CEB estimates 40% of all IT spending in a business happens outside the IT department. With a CIO at the top table and an IT team that is seen as a strategic asset there can be better control of this spending. This will improve governance and security, reduce costs from duplicated technology, and implement a uniform technology adoption approach. An empowered IT department is also a stronger force for change. To accelerate transformation in 2021, the whole enterprise has to agree on the best way forward.
From the initial vision of change, to analysis and preparation, to developing strategy and planning, to executing those plans, the C-Suite and IT need to work together to architect, implement, manage and secure their new technology. There are many opportunities ahead for organisations that can accelerate their digital transformation and maximise the value of their technology. Doing this may mean a change in executive culture, so CEOs and other executives recognise IT’s role as a business enabler, and sponsor and champion new projects. It may demand education and training across the organisation, so that it can fully adopt new technologies and ways of working. And it may even require new technologies and ways of working to allow this level of collaboration. By following this approach, and embedding change management into projects to ensure success, enterprises will be perfectly placed to take advantage of new opportunities and continue accelerating their own evolution.
Methodology:
The survey of 550 senior IT decision makers – half in enterprises with 500-1,000 employees and half in enterprises with 1,000+ employees – was performed in Q3 2020 by Coleman Parkes Ltd. Respondents were from the UK, France, DACH, Italy, Spain, Belgium and the Netherlands.
Plan your cost optimisation journey
Plan your cost optimisation journey and transform your business in just three steps
Cost optimisation projects can be a daunting task – but it becomes simpler when broken down into manageable chunks. Follow our guide to transform your business in just three steps.
1
2
3
Step one
optimise your software spend
The first step in your cost optimisation is to review your software usage and spending.
I. Take stock of your software estate and identify priorities
You may be paying for complex software solutions with features you don’t need, or paying for more software licences than you use. However, taking stock of your software estate can be a complex and challenging task, as non-physical assets are hard to identify. For this reason, many businesses look to a third party to help them audit software.
Create a detailed picture of your current software estate. Where possible, use reports or tools you already have and where there are gaps, use third-party tools to get to the full truth. Once you know what you have, you can check against your entitlements and make sure you are not paying for solutions that you don’t need.
Action:
Find out more.
II. Monitor software usage and identify meaningful patterns
Monitoring usage allows you to identify which software is delivering the best value, and which is not being used to its full potential. You will then be in a position to make informed decisions around which software solutions are best suited to your needs and decide which should be renewed, retired or replaced.
Software Asset Management (SAM) tools are the most effective way to monitor usage. However, if you require a wide range of tools to monitor your software estate, you might want to consider working with a third party. A clear picture of your usage will enable you to check compliance – enabling you to reduce both cost and risk.
III. Rationalise your licensing
Once you have a clear view of your software estate and useage, you should be able to identify opportunities to make savings. You should also be able to gain a clear view of compliance – enabling you to prepare for audits and avoid potential fines. For enterprise-level software users, these measures can result in substantial cost savings.
Where possible, re-allocate existing licences, instead of paying for new ones. You may also be able to reduce the overall number of licences you are paying for, and negotiate better terms with vendors. Software licensing can be a complex area – you may benefit from expertise and guidance and support with your negotiation decision making.
Step two
reduce your hardware spend
The next step in your cost optimisation journey is to review your hardware lifecycle.
I. Only pay for what you need
When procuring hardware, such as laptops, IT departments often choose a one-size fits all device. This is likely to be over specified for some users (wasting money) and underspecified for others (reducing productivity). If you are paying for the laptops upfront, you will also need to purchase extra stock to allow for changes in staff numbers and any broken devices while they are being repaired.
Map out user personas in your organisation and identify three or four devices to fit those personas. You will then avoid paying for over-specified devices. You could also move to an OPEX model and pay to use the devices for a set time period. You would only then need to pay for the number you are using at any one time.
II. Reduce spending on maintenance and support
A major cost area for IT departments is maintenance and support for company hardware. Setting up and configuring new devices, repairing faulty devices and managing relationships with third parties around warranty issues are all time consuming and expensive activities. By moving to an OPEX model you can remove all these issues and allow your IT team to focus on delivering transformational projects that move the company forward.
If you move to an OPEX model, you can choose to have your supplier set up and configure new devices for you. Employees will then be able to use devices right out of the box. You can also opt into a full break-fix service. If a device breaks, or is faulty, your supplier will then replace it with a new device – fully configured and ready for use.
III. Reclaim the value of end-of-life devices
With the traditional procurement model, IT departments are left with the problem of disposing of devices that are no longer usable. This can be an expensive process and needs to be done very carefully to avoid data breaches. Once disposed of, the value of the devices is lost. A better approach is to ensure that your hardware assets can be refreshed and re-used.
By paying to use devices over a three- or five-year period, you completely remove the issue of disposing of them at the end of their useful life. And as you will be returning them, you will not have to pay for the residual value of the device – lowering your total cost of ownership. Your supplier will safely reclaim your assets and where possible re-use or recycle them.
Step three
I. Maximise value and performance
If you have made the move to the cloud, you are probably starting to reap some of the benefits – flexibility, remote working, scalability, access to remote storage and more. But the complexity of cloud pricing and billing makes it very difficult to ascertain whether your cloud solution is delivering good value. To ensure you are getting the best performance, you need to take into account the continual development of new services and platforms by cloud service providers.
The most effective way to optimise your cloud performance is to use a third-party vendor that has already invested in developing cost optimisation capabilities for public cloud services. Insight can help you get the best performance, value and security from your cloud platform.
II. Diminish down time with 24/7 support
Managing cloud services and data centres can also put a lot of strain on your IT department – especially if you have multiple technologies and suppliers. Hiring new staff with the right expertise (or paying for ongoing training) can be expensive. A cost-effective alternative is to allow a third party that has all of the knowledge and experience to provide support for you
A support service like Insight’s OneCall is a cost-effective way to access cloud and data centre support 24/7. Consolidate your support contracts into one unified service and you will benefit from speedy resolution of IT issues, gain better visibility on spending, and free up your IT team to deliver better long-term value to the business
Reap the rewards
Follow the steps above and you’ll be well on the way to creating a more agile and resilient business. If you have any questions, or need any support with your cost optimisation journey, an Insight specialist will be happy to help.
Contact us.
minimise your cloud spend
Reducing your cloud spend is one of the biggest opportunities for cost optimisation.
About Insight
Insight recognises that today, every business is a technology business. We help organisations maximise the value of IT: from strategy and design to implementation and management. Our services include helping procure the technologies organisations need to modernise and transform. Helping organisations adopt those technologies so they fully support business strategy. Giving organisations the guidance they need to maximise the value of their technology investment. And supporting organisations as they keep innovating and unlocking the full value of their resources.
Discover more at be.insight.com
