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News Release from: Economist Intelligence Unit
Edited by the Manufacturingtalk Editorial
Team on 12 February 2007
IT can cut business management costs
According to a recent report, IT can help boost top-line growth while continuing to slash costs by improving the customer experience and helping develop new products and services.
Corporate leaders expect IT's core mission in the business to expand from cost-cutting to enabling revenue generation within a short period of time Most IT leaders accept the challenge, but what does revenue generation really mean for the IT function? For senior business and IT executives in a global survey conducted by the Economist Intelligence Unit, it means above all improving the customer experience and helping develop new products and services
This article was originally published on Manufacturingtalk on 30 Mar 2006 at 8.00am (UK)
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Executive suite pressure on IT to continue improving cost efficiency will doubtless remain, but revenue generation and cost-cutting need not be conflicting mandates.
An overwhelming 91% of surveyed executives believe their firm's IT capabilities can be structured to support both revenue generation and cost reduction.
Creating the right performance metrics, outsourcing non-core processes and implementing new technologies-particularly SOA (service-oriented architecture)-will all be important in helping to create such a flexible structure.
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These are the main findings of a new report, Mission accepted: IT as revenue generator, published today by the Economist Intelligence Unit and sponsored by Capgemini, Cisco Systems and SAP.
This is the second in a series of reports published under the umbrella of the Global Technology Forum, a research programme designed for senior executives who are responsible for managing and deploying information technology in the pursuit of business objectives.
"IT will need to learn how to innovate in new, often unfamiliar ways," said Denis McCauley, director, Global Technology Research with the Economist Intelligence Unit.
"Not only will new skills be required, but companies must ensure that the IT structure allows, and indeed encourages, such innovation." Other key findings of the report include the following.
* Contribution to revenue growth is already the leading metric used by firms to measure return on investment in IT.
Boosting the firm's agility - its ability to adapt to a changing environment - is also a frequently used assessment.
Cost-reduction metrics, meanwhile, are favoured by only a handful of companies-no more than 10% of global respondents.
* Some restructuring of IT is on the cards to encourage innovation.
Meeting revenue-generation objectives will entail some changes in how IT is managed.
Integrating IT staff within business units and assigning them to product development teams are measures that many firms will take to promote innovation in support of revenue growth.
Few firms will go in for full-scale decentralisation, but IT services will be delivered in a considerably more decentralised fashion than is the case today.
* The 'expectations gap' between IT and the executive suite remains.
CEOs and senior technology managers diverge on several prescriptions for enabling IT to fulfil its revenue-generation mission, perpetuating the 'expectations gap' we identified in our previous report in this series.
IT executives believe, for example, that outsourcing non-core processes will have a big impact on IT's ability to innovate in revenue generation, while CEOs are not so sure.
The latter, meanwhile appear to have higher expectations of new technologies, such as SOA, to achieve the optimal IT structure than do IT executives.
* Mission accepted - IT as revenue generator is available to download free of charge at
* About the Economist Intelligence Unit - the Economist Intelligence Unit is the business information arm of The Economist Group, publisher of The Economist.
Through our global network of over 650 analysts, we continuously assess and forecast political, economic and business conditions in 200 countries.
As the world's leading provider of country intelligence, we help executives make better business decisions by providing timely, reliable and impartial analysis on worldwide market trends and business strategies.
* About Capgemini - Capgemini, one of the world's foremost providers of Consulting, Technology and Outsourcing services, has a unique way of working with its clients, which it calls the Collaborative Business Experience.
Through commitment to mutual success and the achievement of tangible value, Capgemini helps businesses implement growth strategies, leverage technology, and thrive through the power of collaboration.
Capgemini employs approximately 61,000 people worldwide and reported 2005 global revenues of EUR 6,954 million.
More information about individual service lines, offices and research is available at
* About Cisco Systems - Cisco Systems (NASDAQ: CSCO), is the worldwide leader in networking for the Internet.
Cisco news and information are available at www.cisco.com.
For ongoing news, please go to
* About SAP - SAP is the world's leading provider of business software.
Today, more than 34,600 customers in more than 120 countries run SAP applications-from distinct solutions addressing the needs of small and midsize enterprises to suite offerings for global organizations.
Powered by the SAP NetWeaver platform to drive innovation and enable business change, SAP software helps enterprises of all sizes around the world improve customer relationships, enhance partner collaboration and create efficiencies across their supply chains and business operations.
SAP solution portfolios support the unique business processes of more than 25 industries, including high tech, retail, financial services, healthcare and the public sector.
With subsidiaries in more than 50 countries, the company is listed on several exchanges, including the Frankfurt stock exchange and NYSE under the symbol 'SAP'.
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