• 20% of Indian enterprises are ‘Tech Led’, 33% are ‘Tech Laggards’
• ‘Tech Led’ companies have higher ‘IT impact’ on business in spite of lower IT spends
Announces ‘Enhancing Value through IT Leverage’ platform for companies seeking ‘Tech Led’ status
New Delhi : One-fifth of Indian enterprises are ‘Tech Led’, while a third are ‘Tech Laggards’, reveals a study by the nextgen knowledge services firm Coeus Age and technology and entrepreneurship researcher CyberMedia Research. The remaining 47% companies are between the two extremes, revealed a joint report ‘The Process of Building Business Value from IT: Concept, Empirical Support and Change & Development Framework’ (November 2011), a first of its kind study for India.
‘Tech led’ enterprises are able to demonstrate a higher impact of IT on business processes and creation of competencies through IT as compared to the ‘Tech Laggards’, says the study of 305 business enterprises across nine industry verticals. Based on how the companies scored on the three levers, identified by Coeus Age, the study mapped enterprises on the empirical model – the BVIT Matrix.
Interestingly, the spending of ‘Tech Led’ enterprises’ on IT as a percentage of revenue is lower than other enterprises.
“Hence, ‘Tech Led’ enterprises are able to generate the highest impact of IT on business processes and business competencies, at relatively lower spend levels, indicating higher value realization per dollar spend,” commented Kapil Dev Singh, Founder and Principal Consultant, Coeus Age.
“As enterprises expect faster results from IT investments with reduced budgets, it is extremely important for the CIO to know how to manage the paradox. As our research suggests the focus has to be on change and development within an organization for IT to perform and deliver”, commented Thomas George, Head, CyberMedia Research.
Based on an empirical model developed by Coeus Age, any enterprise can be mapped on three levers of business value of IT – Business-IT Alignment, Strategic Vision for IT and IT Infrastructure Maturity.
The model and the mapping are depicted in Figure 1 below.
Figure 1: Mapping Indian Enterprises on the BVIT Matrix
Source: ‘Building Business Value from IT, 2011’ report by Coeus Age and CyberMedia Research
“There are many perspectives available on measuring the business value of IT. However, in the absence of sufficient debate, there was a pressing need to evolve specific guidelines on ‘how’ to build business value out of an organization’s IT assets. At Coeus Age, we focus on the ‘how’ and believe that the business value of IT is embedded in an organization’s formal business arrangements and its cultural make up”, added Kapil Dev Singh of Coeus Age.
‘Tech Laggards’ and ‘Tech Led’ enterprises differ significantly on the three levers of business value and their underlying aspects, as listed out below:
- The role of IT as perceived by the senior management and practiced by the organization
- Communication, partnership and architectural alignment between business and IT
- Governance structure and mechanisms for IT decision-making
- CIO role definition and organizational support for the same
- Value measurement mechanisms (and metrics) for evaluating IT investments
- IT management processes
- Architecture definition at data, application, technology and communication levels
- IT infrastructure, applications, security and communication technologies deployed
- Integrated framework for IT and communication platforms
- New technology identification and development processes, and
- IT skills availability and development
“In view of the above, building business value involves a change with a three-pronged focus – the attitude or ‘mental makeup’ of senior management, the organization structure and its ‘formal’ and ‘informal’ relationships, and the business practices followed. In an era of uncertainty and increased global competition, businesses everywhere urgently need the ‘know how’ to compete with the help of IT”, Kapil further added.
Figure 2: Mapping Indian Enterprises on the BVIT Matrix –
IT Spend as a Proportion (%) of Revenues
Source: ‘Building Business Value from IT, 2011’ report by Coeus Age and CyberMedia Research
“We are delighted to partner with Coeus Age for this study that brings out a fresh perspective on ‘how to derive business value from IT’. At CyberMedia Research we believe that the next wave of IT adoption will be built on the answer to this fundamental question”, Thomas concluded.
About “Building Business Value from IT, 2011” Study
The ‘Enhancing Value through IT Leverage’ Framework (developed by Coeus Age) envisages that the value of IT is embedded in the strategic vision, the formal business arrangements and the cultural make-up of an organization. As a result of adoption and usage of IT by an organization and interaction with these forces, three levers of value realization emerge – Strategic Vision of IT, Business-IT Alignment and IT Infrastructure Maturity. Any organization can be measured on these three levers (using an instrument developed by Coeus Age); based on their scores organizations can be ranked ‘high’ or ‘low’. When these ranks are plotted on a three dimensional matrix, termed the BVIT Matrix, the scores give rise to eight quadrants – Tech Laggards, Need for Culture Catch-Up, Tech Struggler, Tech Achiever-Business Aspirant, New Tech Aspirant, Culture Struggler, Need for Tech Catch-Up, and Tech Led.
The “Building Business Value from IT, 2011” study mapped 305 Indian enterprises across nine industry verticals – BFSI, Manufacturing (Automotive, FMCG, Discrete & Process), Energy & Utilities, Infrastructure & Construction, Exports (excluding IT-ITeS), Healthcare, Pharmaceuticals & Biotech, Retail and Telecommunications, Media & Entertainment on the BVIT Matrix.
About Coeus Age
Coeus (Koios) was the Greek Titan of Intelligence, the axis around which Heavens revolved.
In the current Age, enterprise intelligence is the axis around which organizing happens, a true source of strategic advantage and success.
Coeus Age is a KDSnext venture, a next generation knowledge domain service provider. Coeus Age is focused on bringing the latest thinking in the field of Organisation Change and Development, IT Management, Process Maturity and Strategy to Indian enterprises, thus enabling them build business value from IT. For more details, please visit www.coeusage.com or www.kdsnext.com.
