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BMC: Unfit measurement keeps IT off the pace

  • 07 March, 2007 10:54

<p>IT must standardise routine management tasks to boost performance, new Economist Intelligence Unit research says.</p>
<p>Two in three companies do not measure business-relevant service level agreements, keeping management in the dark about IT’s true contribution to business, according to a BMC-sponsored Economist Intelligence Unit survey of 400-plus senior Asia Pacific business and IT executives.</p>
<p>Deficient measurement – where nearly one in four organisations (24%) do not even formally measure the performance of IT operations – backdrops a widely held belief that IT is capable of contributing much more to the business. Eighty four percent of those surveyed say IT could add much more value to the company than it does presently.</p>
<p>But for IT to add more business value, management of routine IT tasks must be standardised and centralised. Currently, this job is done poorly, with survey results showing a spectrum of deficiencies in standardised procedures for recording IT-related incidents; the ability to identify IT infrastructure components and link them to specific business services; and the ability to produce quickly an accurate report of IT assets.</p>
<p>• Only 47% of organisations have a standard way of recording incidents</p>
<p>• Two in five (41%) cannot accurately report IT assets</p>
<p>• Similarly, 44% do not have a picture of which IT components attach to specific business services</p>
<p>BMC Software Managing Director for Australia and New Zealand, Mike Davies says the results show that in many organisations IT’s contribution is still off the pace: “IT needs to get fitter if it is to perform at the speed of business. IT managers must be able to respond from a business, rather than a technology, point of view. You simply can’t do that without standardisation.”</p>
<p>On similar lines, nearly half (48%) of all senior executives say that in their organisation IT often faces conflicting priorities among other business functions.</p>
<p>But could this situation be improved with better synchronised IT and business planning? Survey results show fewer than half (47%) of all organisations integrate IT and business planning, and a similar proportion (51%) can’t confirm that their IT investments have crossed organisational boundaries, supporting initiatives like shared services.</p>
<p>But it’s not all grim and the heart of most organisations is in the right place. Seventy three percent of senior executives surveyed believe IT is encouraged by the business. What’s more, coupled with the overwhelming belief of IT’s capacity for adding more value is the almost universal goal of synchronising IT initiatives with those of the rest of the business. As a result of this improvement, executives expect business to benefit through faster and easier transformation, increased capacity for innovation, and increased profits.</p>
<p>Moreover, there are already indications that in some organisations, IT has increased value to the business. Sixty-six percent of senior executives say that IT is able to support new business initiatives. Seventy percent say IT has been successfully used to improve business processes over the past five years, and 66 percent say their organisation’s IT operation is capable of maintaining satisfactory business performance.</p>
<p>Findings distinguishing ANZ executives from their cousins in South East Asia and Greater China indicate a healthier state of affairs. Despite more ANZ executives restricted by an obscured view of IT assets and a predilection to use lowering cost of ownership to measure IT operational performance, overall survey results show IT in ANZ organisations to be more in tune with the business. More specifically, more ANZ executives say their organisation is capable of maintaining satisfactory business performance than executives generally (73% vis-a-vis 66% for the total survey) and are better at introducing new technology that has influenced the strategic direction of the business. This possibly accounts for management in ANZ to be less inclined to label IT as a commodity, and to place demands on the IT department to transform itself from an infrastructure steward to an innovation leader. Interestingly, despite their tendency to measure IT operational performance using lower cost of ownership, more ANZ executives saw “nimbleness” as a benefit of better synchronised IT and business.</p>
<p>Significant variations distinguishing ANZ executives from all executives:
• Lower cost of ownership to measure IT operating performance: 36% of ANZ execs, vis-à-vis 29% overall, measure lower cost of ownership</p>
<p>• View of IT assets: Only 48% of ANZ execs, vis-à-vis 59% overall, say their organisation is able to produce an accurate report of IT assets</p>
<p>• Performance of IT operations: 73% of ANZ execs are satisfied that IT operations capable of maintaining satisfactory business performance, vis-à-vis 66% overall</p>
<p>• Commodity view of IT held by senior managers: Only 37% of ANZ execs agree that senior managers hold a commodity view of IT, vis-à-vis 43% overall</p>
<p>• IT supporting new business initiatives: 72% of ANZ execs, vis-à-vis 66% overall, say IT is able to support new business initiatives</p>
<p>• IT transformation: Only 54% of ANZ execs identify the need for IT to transform itself from an IT infrastructure steward to an innovation leader, vis-à-vis 71% overall</p>
<p>• IT synchronised with business: 70% of ANZ execs rated their IT six or more on a scale on one-to-ten (where 10 indicated IT that was perfectly synchronised with the demands of business and one indicated degrading performance), vis-à-vis 66% overall</p>
<p>• Benefits stemming from better synchronised business and IT: 61% of ANZ execs said “nimbleness”, vis-à-vis 46% overall</p>
<p>About BMC Software
BMC Software [NYSE:BMC] is a leading provider of enterprise management solutions that empower companies to manage their IT infrastructure from a business perspective. Delivering Business Service Management, BMC Software solutions span enterprise systems, applications, databases and service management. Founded in 1980, BMC Software has offices worldwide and fiscal 2006 revenues of approximately $1.5 billion. For more information, visit
BMC Software, the BMC Software logos, and all other BMC Software product or service names are registered trademarks or trademarks of BMC Software, Inc. All other trademarks or registered trademarks belong to their respective companies. © 2006, BMC Software, Inc. All rights reserved.</p>
<p>Notes to Editors
In January 2007, The Economist Intelligence Unit polled CEOs, CIOs, and other senior executives based in Asia Pacific for their opinions on the role of IT in their organisation. Among the 414 respondents, 21 percent are from India, 16 percent from Australia/New Zealand, 13 percent from Singapore, nine percent from Hong Kong, eight percent from Malaysia, seven percent from China, seven percent from Japan, and four percent from South Korea.
Among the respondents, 63 percent are C-level and 40 percent have IT roles. Twenty-five percent have the title of CEO, President or Managing director and 14 percent have the title of CIO or Technology director. Thirty percent of companies had annual sales of over US$1 billion and 55 percent had annual sales of less than US$500 million. Furthermore, 46 percent of respondents said profitability grew by five to 20 percent a year at their company in the past two years. And 24 percent reported profitability growth of more than 20 percent.</p>

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