ROI on IT spend: the digital divide

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By: Wise Marketer Staff |

Posted on December 18, 2001

It's not what you've got that counts - it's how you use it. At least, in information technology.

New research shows that how cleverly companies spend their money on information technology is more important than how much they spend - and a new "digital divide" is now forming. There is a sizable gap in the return on investment achieved by wise spenders over the others.

Nearly three in four respondents are more willing to invest in IT now than they were a year ago. Some 40% said that they expect to increase their IT budget next year, while 43% expect it to be unchanged. And that's in the middle of an IT downturn.

Surgers, Stagnants and Strugglers
The Unisys Information Technology ROI Study revealed that companies fall into one of three categories: ROI Surgers (43.5%),  who have achieved positive ROI; ROI Stagnants (42.5%), who are experiencing nominal ROI, and ROI Strugglers (14%), who have negative ROI.

The interesting bit is that the three groups are not separated by their overall IT investments, but by how strategically they have used their investment. And, according to the survey, they were aware of it: the Surgers thought that they were making smart IT decisions and the other two groups acknowledged that they should be making better decisions.

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According to Pete Samson, Unisys VP and general manager of Technology Sales Development, "Companies with similar financial resources are separated by how wisely they put those resources to use. These findings should serve as a call to action for companies - if you are not seeing positive ROI from IT spending, you risk being left behind by competitors who leverage the power of technology strategically. So find a smart CIO, partner, vendor or consultant who can help you gain a strategic advantage from technology today."

Uneven distribution
The distribution of IT funds within companies is not always balanced: while e-business is often not rated as the highest priority, it tends to be well funded. However, "increasing productivity, performance and efficiency" are generally recognised as top priority but are not so well funded.

When asked which technologies provide the highest ROI, Surgers tended to name enterprise-wide systems rather than personal technologies, with the leading responses being servers (76%), software (72%), workstations (68%) and personal technology (48%).

The study, conducted in October and November, surveyed senior-level IT professionals from a range of industries across the United States.

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