ONTARIO, Canada – Executives express widespread dissatisfaction with the ability of their organizations to assimilate and respond to business change, according to a new study issued today by the Business Performance Management Forum (BPM Forum) and webMethods Inc.
While recognizing the strategic role that IT can play in addressing these requirements, these executives also indicate that IT often fails to keep pace with the demands of their business. Due to these limitations, they face significant constraints in confronting emerging risks and opportunities, as well as additional challenges in their ability to create long-lasting competitive differentiation.
In fact, some three quarters of executives surveyed from larger companies with more than $500 million in revenues said they are not satisfied with the ability of their companies to respond to change. Forty-five per cent of these executives believe that their IT departments are either having “significant difficulties” keeping pace or “can’t keep up at all.”
“Executives in our study were consistent in their need to better grapple with business change,” said David Mitchell, president and CEO, webMethods Inc. “Specifically, they recognize that the increasing pace of change requires a new model that allows them to more readily transform operational insight into better business performance. The other key finding is that IT – despite current challenges – is viewed as critical to achieving this goal. What’s clear from these executives’ responses is that the more business- focused and outcome-oriented IT organization will ultimately thrive as a ‘game changer’ in this new environment.”
Executives see the ability to more rapidly build new applications, improve business processes and gain more relevant, real-time insights into critical market and operational developments as delivering significant business value by improving their ability to anticipate and respond to change. However, only one-third of executives are satisfied with the ability of their companies to respond to change. For larger companies with revenue of more than $500 million, the number drops further to just one in four.
Only about 30 per cent of respondents say they have the ability to frequently access real-time insight into operations and business processes. Respondents say the leading pain points requiring real-time information access include a need for improved competitive intelligence, more accurate customer information and better performance metrics.
Business executives indicate that rapid changes in customer preferences, competitive pressures, new product and revenue opportunities, increased regulatory requirements, and the need for greater operational efficiency all drive the need to redesign business processes and create new applications. Unfortunately, they also report that an average of 40 per cent of all core business processes are in need of some kind of IT fix. Larger companies report that this number is 45 per cent with slightly more than a quarter of these respondents indicating that more than 60 per cent of their core processes are broken and in need of IT repair.
In regard to actual performance, respondents indicated that their IT departments were challenged in meeting these expectations. In fact, among larger companies with revenues above $500 million, some 45 per cent of respondents say their IT organizations are either having “significant difficulties” or “can’t keep up at all.”
And yet, these executives still indicated they believe that IT matters more than ever. Some two-thirds of all respondents, and more than three-quarters from larger companies with revenues above $500 million, said IT plays an important role in creating market differentiation. Only about 10 per cent of respondents – and five per cent among larger companies – said IT was “not very important” to market differentiation.
There is a significant sentiment among business executives that service-oriented architecture will become a critical enabler of the Alert Enterprise with 64 per cent of larger company executives concurring with this point. While few companies are far along in implementation, a high percentage is at least in discussions. Only about 14 per cent of respondents, seven per cent among large companies with revenues above $500 million, say they have no plans to implement SOA.
“The Alert Enterprise Audit indicates there is still a significant gulf between the expectations of business executives and the capacity of IT departments to keep up with demand,” said Dave Murray, a BPM Forum executive and co-author of the report. “Closing the gap is an essential requirement for becoming an Alert Enterprise.”
Mark Cox writes for EchannelLine.Com.
