Executive Briefings

A.T. Kearney Study Maps a Decade of Shrinking IT Innovation

A new study by global management consulting firm A.T. Kearney, Delivering Technology Innovations, finds that while industry leaders overwhelmingly acknowledge the value of IT as an important strategic differentiator, investment in IT innovation misses target levels more than 75 percent of the time. Moreover, although innovation accounted for 30 percent of the average IT budget in 1999, it has fallen to less than half of that -- 14 percent -- in the subsequent 10 years.

The study found that IT innovations were adding value in virtually every aspect of a business, from sales and marketing through R&D and product development, manufacturing and supply chain, and even mergers and acquisitions. Yet a successful IT program does not come easily, and the study identifies the greatest IT growth barriers as complexity, inconsistent data, and excessive time spent on daily activities. Further, it finds that the lack of effective enterprise integration and a limited incubator environment are the two most important reasons why IT innovation projects fail.

"What we discovered, though, was that IT innovation doesn't need to fail, and it doesn't need to be hugely expensive either," says Bob Haas, leader of A.T. Kearney's Strategic Information Technology Practice. "In fact, it is often the standard of mature technologies used in innovative, business-aligned approaches that create the greatest impact."

But in order to leverage IT successfully, innovation has to be thoughtfully planned. The report lists six mandates for IT innovation that it says are common among the companies it studied that had the best results with IT innovation.

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A new study by global management consulting firm A.T. Kearney, Delivering Technology Innovations, finds that while industry leaders overwhelmingly acknowledge the value of IT as an important strategic differentiator, investment in IT innovation misses target levels more than 75 percent of the time. Moreover, although innovation accounted for 30 percent of the average IT budget in 1999, it has fallen to less than half of that -- 14 percent -- in the subsequent 10 years.

The study found that IT innovations were adding value in virtually every aspect of a business, from sales and marketing through R&D and product development, manufacturing and supply chain, and even mergers and acquisitions. Yet a successful IT program does not come easily, and the study identifies the greatest IT growth barriers as complexity, inconsistent data, and excessive time spent on daily activities. Further, it finds that the lack of effective enterprise integration and a limited incubator environment are the two most important reasons why IT innovation projects fail.

"What we discovered, though, was that IT innovation doesn't need to fail, and it doesn't need to be hugely expensive either," says Bob Haas, leader of A.T. Kearney's Strategic Information Technology Practice. "In fact, it is often the standard of mature technologies used in innovative, business-aligned approaches that create the greatest impact."

But in order to leverage IT successfully, innovation has to be thoughtfully planned. The report lists six mandates for IT innovation that it says are common among the companies it studied that had the best results with IT innovation.

Read Full Article