"These changes are driving pressure on IT organizations to play a larger role, to be operationally flexible, reduce overhead, and increase customer satisfaction to counter market volatility," said Mr. Reeves. "IT needs to move beyond its traditional role as a cost center and focus on business enablement. To truly optimize for the new 'borderless business environment,' it's key that IT help companies drive towards one view of their products/services, their customers, and their financials. This is something that most companies still find tremendously challenging."The Hackett Group's research found that organizations are expected to experience a small increase in IT investments, with operating budgets rising just over 2 percent in 2013. While the planned increase in IT investment is modest, it is significant compared to other business services, which anticipate the need for both cost reductions and staff cuts. Reductions in IT staff of less than 1 percent are expected, but these are minimal compared to some other business services functions, such as finance, where a 9x larger reduction in force is expected. Demonstrating IT's impact on the business is one critical issue IT leaders expect to address in 2013. Companies are clearly emphasizing technology’s central role in enabling overall strategy, and IT has the opportunity to be a trusted partner and leader in this transformation. To do so, it needs to strengthen its relationship with sponsors and show its value in business terms to justify the investment. Three of the top priorities identified by IT leaders in The Hackett Group's study address this: building business relationship management capability; remaking perceptions about IT as a business-focused service; and measuring IT’s performance in business-facing terms. Several priorities identified in The Hackett Group's study demonstrate a focus on the issue of driving business-enabled IT innovation for 2013. At its best, IT can gain a reputation for innovation by leading the business in transforming its capabilities, experimenting with new ways of doing things under tight constraints, and identifying new analyses to perform on data to obtain competitive advantage. For 2013, IT leaders are focusing on enabling analytics and identifying new opportunities to reduce complexity and costs. To foster a culture of innovation, IT needs to provide opportunities for teams to experiment, even if these experiments sometimes fail.
Finally, The Hackett Group's study shows a strong focus on future-proofing the IT service delivery model for 2013. As companies become more global and vendors offer more services that can be consumed directly by the business, IT is rethinking its role, focusing less on building the technology and more on enabling the capability. As a result, IT’s operating model needs to be radically different than it was 10 or even 5 years ago. Foundationally, IT executives have cited the need to adapt the function’s Service Delivery Model to support global operations, including a substantial increase in integration activity. In addition to scale changes, though, IT needs to focus less on building technology and more on enabling capabilities. In part, this transformation involves taking a leadership role in analytics, understanding and presenting IT solutions and performance in business terms, clarifying the cost of IT services, and incorporating SaaS options in the technology evaluation process. A key element of accomplishing all this will be talent management, with IT leaders needing to ensure that they have staff with the skills that are required, and have organized staff into high-performance teams to ensure their success.The Hackett Group's 2013 IT Key Issues Study, "Enabling Borderless Business Services: IT’s Key Issues of 2013," is available, following complimentary registration, at http://www.thehackettgroup.com/research/2013/key2013itex/ About The Hackett Group The Hackett Group (NASDAQ: HCKT), a global strategic business advisory and operations improvement consulting firm, is a leader in best practice advisory, business benchmarking, and transformation consulting services including strategy and operations, working capital management, and globalization advice. Utilizing best practices and implementation insights from more than 7,500 benchmarking studies, executives use The Hackett Group's empirically-based approach to quickly define and implement initiatives that enable world-class performance. Through its REL group, The Hackett Group offers working capital solutions focused on delivering significant cash flow improvements. Through its Archstone Consulting group, The Hackett Group offers Strategy & Operations consulting services in the Consumer and Industrial Products, Pharmaceutical, Manufacturing, and Financial Services industry sectors. Through its Hackett Technology Solutions group, The Hackett Group offers business application consulting services that help maximize returns on IT investments. The Hackett Group has completed benchmark studies with over 2,800 major corporations and government agencies, including 97% of the Dow Jones Industrials, 86% of the Fortune 100, 90% of the DAX 30 and 48% of the FTSE 100.
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