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Great Expectations the Changing Role of IT in the Business

Great Expectations the Changing Role of IT in the Business

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Great expectations
The changing role of IT in the business
A report from the Economist Intelligence Unit
sponsored by Capgemini, Cisco Systems and SAP
\u00a9 The Economist Intelligence Unit 2006
1
Great expectations
The changing role of IT in the business
Great expectations: The changing role of IT in the
business is the first in a series of reports from the

Economist Intelligence Unit\u2018s Global Technology
Forum, a research programme targetted at senior
executives responsible for managing and deploying
information technology in the pursuit of business
objectives. Jeanette Borzo was the author of the
report, and the editor was Denis McCauley. The Global
Technology Forum is sponsored by Capgemini, Cisco
Systems and SAP.

The research for this paper is based on a global
survey of 288 senior executives, as well as interviews
with CIOs and other senior technology managers.
The Economist Intelligence Unit\u2019s editorial team
executed the survey, conducted the interviews and
wrote the report. The findings and views expressed in
this report do not necessarily reflect the views of the
sponsors. The Economist Intelligence Unit bears sole
responsibility for its content.

Our sincere thanks go to the survey participants and interviewees for sharing their insights on this topic.

September 2006
Preface
C
2
\u00a9 The Economist Intelligence Unit 2006
Great expectations
The changing role of IT in the business
IOs and IT managers today face no shortage of
challenges, from overseeing the convergence

of voice and data networks to grappling with
compliance, data security and tight spending budgets.
Their jobs are set to become tougher: CEOs and
boards expect information technology\u2018s mission to
expand from cost cutting to revenue generation, and

relatively quickly.

This is among the major findings of a new Economist
Intelligence Unit research programme, sponsored by
Capgemini, Cisco Systems and SAP, on the evolution
of IT\u2018s role within the business. The study is based
on a global survey of 288 senior executives in both
technology and business functions as well as in-depth
interviews with senior IT executives.

Other key findings of the research include the
following:
\u25cf An \u201cexpectations gap\u201d exists between IT and the
executive suite. Most technology managers (62%)

also believe that enabling revenue generation will
come to be IT\u2018s primary mission within the next
three years, but CEOs and board members (83%)
are almost wholly convinced of it. The gap yawns
particularly wide in Asia-Pacific and Europe, where
many IT managers retain a strong belief in the
primacy of IT\u2018s cost-reduction role\u2014partly due
to continued C-level insistence on hitting cost-
efficiency targets. This gap will need to close\u2014and
C-level priorities to become more consistent\u2014 for
better IT-business alignment to be achieved.

\u25cf Organisational and technical solutions will be
tapped to improve IT\u2018s fit with the business
objectives. The acquisition of new technologies

tops the list of initiatives that survey respondents,
including CEOs, hope will improve the level
of IT-business alignment. But organisational
measures are also prominent: all executives place
strong emphasis on joint project management
responsibility between IT and business managers,
as well as the use of cross-functional teams.

\u25cf Some decentralisation of IT functions to other
business units is also likely. The beginning of

the end of the IT department as we know it? The
majority of surveyed executives think not, at least
for the next five years. But as many CEOs and
board members (41%) foresee the disappearance
of a stand-alone IT department as those who do
not. More than a few companies appear ready
to consider radical solutions to bring IT and the
business closer together.

Executive summary
About the survey

A total of 288 executives from 58 countries participated in the first Global
Technology Forum survey, conducted by the Economist Intelligence Unit in
May 2006. 40% of the respondents were based in Europe, 30% in the Ameri-
cas and 26% in Asia-Pacific.

In addition to being cosmopolitan, our survey sample was very senior.
Fully 49% of respondents were C-level executives such as CEOs, CIOs and
CFOs, and the other half consisted of senior managers such as heads of
business units and departments. In order to compare views of IT from
different functional perspectives, we strove to achieve a rough balance
between IT and non-IT executives\u2014the former accounted for 43% of the
sample. 17 industries were represented in the survey, with the largest number
of respondents hailing from the financial services, professional services,
manufacturing and technology sectors. Participants also came from a range
of company sizes, with 46% reporting annual revenue of over US$500m, and
19% over US$5bn.

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