Microsoft's vision of the future.

Business leaders increasingly involved in technology strategy and operations, IT spending decisions, and measuring return on investment

A report by the Economist Intelligence Unit (EIU) says recessions are an opportunity for companies to reassess strategy and trim unnecessary fat from their organisations. For information technology (IT) professionals, this means ensuring that all initiatives are clearly tied to a business goal and have metrics to track success - - especially as the economy begins to improve. However, this is easier said than done. Meanwhile, the findings of a survey by UK document management software company, Version One, has revealed that 41% of senior IT professionals admit that they “don’t know” what cloud computing is. Version One carried out the research with 60 senior IT professionals (IT directors and managers) across a range of UK public and private sector organisations. This research follows-on from a similar survey carried-out by Version One which highlights that two-thirds of UK senior finance professionals (finance directors and managers) are confused about cloud computing.

The EIU says business and IT executives need to cooperate to ensure that their plans mesh together well and add value to the wider business. This need for close cooperation between IT and business units is the main observation to be drawn from a new report, Preparing for renewed growth: Setting strategy for IT and the business.

To achieve good working relations between IT and business units many companies—including Hertz Global Holdings, Sunoco and others—have set up cross-functional steering committees that make decisions on current and future IT projects. Often, these initiatives are focused on improving customer service or loyalty. Companies are also checking on the success of such projects more frequently, ensuring that metrics are in line with expectations. “It’s way too easy, as things start to back up, to get undisciplined and sloppy,” says Joseph Eckroth, CIO of Hertz Global Holdings. “If we remain in lockstep around business priorities, we’re going to be able to accomplish more, with fewer resources.”

IT departments are also working with business units improve efficiency, by consolidating software and systems and eliminating redundant efforts of employees in various regions. “Unnecessary waste not only bloats a company’s costs but can inhibit future growth,” says Debra D’Agostino, deputy director for industry and management research in the Americas at the EIU. “As companies prepare for better economic times, it’s important to reduce unnecessary or redundant systems to make sure that business and IT strategies are not only properly aligned, but flexible enough to move quickly to meet shifting market demands.”

To support that flexibility, the report also recommends that IT departments:

• Find ways for technology workers to gain business unit experience:It is not necessary to move a technology worker into a business role per se. Simpler tactics—including locating the worker in the same office as business colleagues—can accomplish the same goal.

• Assess long-term talent needs and establish programmes to keep key workers:The greatest need is for technology workers who can take business requirements and translate them into specifications. Business requirements management is a talent that companies need to cultivate and reward.

• Reassess the effectiveness of the processes for evaluating IT investments and ongoing IT projects:Making sure the right projects get funded is the first imperative; finding ways to track, redirect and, if necessary, kill unsuccessful projects is the second.

• Embrace customer data, both quantitative and qualitative:Customer information offers insight and data points that must be weighed against competitive alternatives and economic realities.

Version One says in its survey that cloud computing being in the media spotlight, only a minority of respondents (5%) say that they use it “a lot” and less than a quarter of those surveyed (19%) reveal that they only use cloud computing sparingly. Almost half of respondents (47%) admit that their company doesn’t use cloud computing with the remaining 29% conceding that they “don’t know” whether their organisation uses it or not.

Julian Buck, General Manager of Version One, says, “Although this is only a small survey of IT professionals, the results are nonetheless very alarming, especially as IT professionals are the very people that need to understand cloud computing so that they can explain its benefits to management.”

Buck continues, “It is clear from the survey results that there are a number of contrasting views as to what cloud computing really is, which is hardly surprising in light of the many different cloud computing definitions in the public arena. For instance, Wikipedia defines it as ‘Internet-based computing’ while Gartner refers to it ‘as a service’ using Internet technologies. IT expert, John Willis, writing in his cloud blog says that ‘virtualisation is the secret sauce of a cloud’ and provides different levels of cloud computing. With so many definitions circulating, clarity is urgently needed.”

Only 2% of respondents say that their company is “definitely” going to invest in cloud computing within the next twelve months whilst 30% state that their organisations “may” invest in this technology. 45% admit that they “don’t know” whether their organisations will be investing in it or not with the remaining 23% stating that they currently have no investment plans. For those who definitely or maybe have plans to invest in cloud computing, some of the key business drivers cited include reduction in overheads and paper, ease of use, cost savings and the ability to provide collaborative tools for teaching and learning.

Buck adds, “If organisations are going to embrace cloud computing in the future it’s essential that a single, simplified explanation is adopted by everyone. Failure to cut through the confusion could result in organisations rejecting this technology and missing out on the benefits it provides.”