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Emerging technologies keep firms competitive: study

Veronica C. Silva | Feb. 7, 2013
Researchers claim they have concrete evidence of the benefits of investing in IT

A new study on IT in business is claiming that it has found "concrete evidence" that links IT investments to tangible business benefits.

Researchers from international business school INSEAD are claiming that based on their global study of multinational companies, there is proof that IT investments can as much as double the organisation's chances of being highly competitive. Researchers even claim that firms that have invested in IT can outperform their peers.

Insead, which has campuses in France, Singapore and Abu Dhabi, said the global study was conducted by its eLab academic centre that is focused on studying digital technology. Surveyed were more than 200 senior executives, representing different industries from across Europe, Asia Pacific and North America. Most of the respondents represented large, global companies.

Results: which technologies

The study, which was done in collaboration with AT&T, showed that investing in new emerging technologies, such as cloud computing, mobility and online collaboration, is well worth it as companies have reported increasing their chances of competitiveness anywhere from 35 percent to 74 percent.

The study gathered information about the amount of IT investments of companies as a share of the budget and some key "business enablers" and performance indicators to determine the firms' productivity and competitiveness.

The study concluded that investments in IT, coupled with strong business enablers, can increase the probability of the firm becoming highly competitive.

Firms in the Asia Pacific region are investing more in IT compared to other regions. Research showed that that as a percentage of their budgets, AP companies are planning to grow their investments in mobility technology by as much as 31 percent in the next three years from 17 percent, representing an 82 percent growth. For cloud computing, AP companies said they are planning to double their investments from 12 percent to 30 percent (150 percent growth), and from 18 percent to 26 percent (44 percent growth) for collaboration tools.

In contrast, the percentage growth of European companies' IT investment plans for the new technologies will reach only as much as 96 percent growth (for cloud services).

Business enablers

But Insead researchers also noted that investing in technology is not enough. Insead said firms also need strong and complementary business resources, such as enough management-focused and technology-focused talent. Without business enablers, Insead warned that the investments in IT will be completely wasted.

To ensure that companies increase the likelihood of being competitive, Insead noted a combination of strong business enablers and more investments in new technology. If firms have weak business resources though they invest in IT, their competitiveness does not increase at all, the researchers noted.

The study also pointed out that one of the most important business enablers that can make IT investments work is digital maturity, defined as the extent to which technology, business process and data components are standardised, shared and integrated.

 

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