Economist Research: Decision-Making in Turbulent Times

Technology is indeed the answer!

Or at least, that’s what is suggested by a new report from the Economist Intelligence Unit, Staying the course? Technology decision-making in turbulent times. The study shows that the current climate provides a good opportunity to drive through major initiatives, that business leaders are looking to technology as in important instrument to prepare their firms for recovery, and that the key importance of better information systems is to better understand customer behavior.

Key findings of the study, which was sponsored by SAP BusinessObjects, include the following:

CIOs are not losing their place at the table. Where they have gained a voice in major business and technology decisions, CIOs positions are not being undermined as a result of the current economic crisis. Very few survey respondents believe that the influence of CIOs in technology investment decisions will decline in their firm over the coming year. A sizeable minority, meanwhile, expect the CIOs involvement in high-level business strategy discussions to expand.

Opportunistic firms are receptive to renewed technology investment. A large minority (44%) of the firms surveyed say that they will be “on the business offensive” in the coming year, looking for acquisitions or openings to take market share from weakened rivals. These firms are more likely than those adopting a “defensive” stance to consider selective new investment in technology. Investment proposals will not enjoy an easy ride, however. More executives are now involved in the approvals process, and the volume and detail of information required is increasing. Higher rates of return are demanded, and projects with shorter return periods are being favored.

Most firms are averse to suspending existing technology projects. Less than one-quarter of survey participants believe that major existing technology-led projects should be suspended until business conditions improve. Indeed, many believe the crisis presents a good opportunity to drive through such initiatives. Few executives, however, even at growth-oriented firms, believe that now is a good time to launch entirely new IT projects. CFOs themselves support the continuance of major existing projects, but it is unclear how often spending requests in such areas will stand up to competing investment priorities in the business.

The focus of investment continues to be on improving customer relationships. Customer service will remain the priority area for IT investments during the coming year. This is for good reason, as evidence mounts from several sectors that customer loyalty is eroding and customer churn increasing. Information management will also be high on the priority list, especially when it comes to projects designed to improve firms’ understanding of customer behavior.

The full results of the study are available free of charge at www.eiu.com/sponsor/sap/technologydecisions