December 19, 2014

McKinsey Survey Finds Innovation, Collaboration Garnering More IT Budget

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Technology supporting process or service innovation and employee collaboration is gathering more support within businesses of all sizes and across all regions.

That is according to a just-published survey by McKinsey Quarterly, reflecting the responses of 927 executives surveyed online during early October 2011.

“Improving effectiveness of business processes” and “Improving efficiency of business processes” were the top 2 most important current IT priorities for the respondents, which is a shift from the past several years when technologies for reducing IT operations costs dominated the mindsets of IT executives.

A bigger portion of IT budgets will be dedicated to end-user communications and collaboration, innovation, and analytics capabilities than in the past. The McKinsey survey respondents reported that approximately 46 percent of their IT budgets would be spent on investments of that nature; that compares with budget allocations of 35 percent in 2011.

Here are 10 areas where businesses are increasing their investments. (The numbers in the parenthesis reflect the percentage of businesses that say they have “deployed at scale.”)

  1. Data and analytics for customer engagement or improved business processes (30 percent)
  2. Supporting employee collaboration or access to internal systems (30 percent)
  3. Social Internet technologies to support increased collaboration across the business, with business partners or customers (18 percent)
  4. Existing online social platforms to increase customer engagement, branding or marketing (16 percent)
  5. Using mobile and machine-to-machine connections to monitor or control assets (15 percent)
  6. Engaging business partners or suppliers (15 percent)
  7. Creation of unique new products, services or business models (12 percent)
  8. Engaging customers with mobile apps or sites that replicated other channels (12 percent)
  9. Embedded computing (eg smart sensors) (9 percent)
  10. Engaging customers with apps leveraging mobile-specific capabilities (eg location-based services) (8 percent)

“While most respondents indicate that these platforms have yet to be deployed at scale, significant shares say their companies are using them in selected areas or piloting them,” wrote the McKinsey researchers in their analysis of the data.

As you might imagine, some of the things holding companies back from these deployments include technical challenges, especially involved with data analytics, and nascent support from corporate board rooms for technology initiatives. Still, as IT organizations shed the corporation notion that they exist solely to help keep costs in check, the understanding is growing that technology serves innovation — both in services and in the ways that workforces collaborate.


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