Durham Business School and Microsoft (both partners of M Institute) have collaborated on a piece of research that has an important finding: growing companies make greater use of IT to meet their key business challenges compared to companies that are declining. M Institute co-founder Jyoti Banerjee investigates.
The research, carried out among 401 businesses with up to 100 employees, does not attempt to distinguish cause from effect. But it does claim that growing companies are more likely to invest in IT in order to better manage customer data, better manage business processes, comply with regulation, and access business information when out of the office.
Although much of the report is focused on analysing the different size cohorts, its writers, Bill Snaith and Ian Stone of Durham, have done an interesting thing in maintaining a constant thread in the report which analyses the research findings by growth performance. Compared to declining companies, growing companies are more likely to:
* Use more diversified sources for IT advice
* Have more software and arguably more sophisticated systems
* Have more appreciation that IT can (and has) delivered benefits to their business and how it might help them overcome challenges
* Talk about IT in terms of what it can do for employees, and so have a people-centric attitude to IT
* Display greater willingness to spend more on IT in future to generate competitive advantage and growth
I asked Simon Hughes, director of small and medium business in Microsoft UK, why the report did not have greater coverage of medium organisations, as a fair proportion of the companies studied were small companies. Hughes replied that “the key findings around the differences between growth and non-growth firms do highlight learnings that apply to larger-sized firms.”
The evidence is also clear that growth firms use more of today’s popular technologies, such as remote login / home-working or the use of smartphone devices. They also make more use of websites for marketing and for direct sales to customers.
One surprising finding, though: 97% of the growth companies felt that IT had delivered the benefits they expected from their investments, which compares with 92% of the non-growth organisations. Snaith and Stone claim that this implies that IT was central to the output achievement of the growth firms. I am not sure I agree – the difference between 97% and 92% seems pretty small. The bigger surprise, in my opinion, is that over 90% of a bunch of different British companies felt that IT delivered for them.
It was only a few years ago that Nick Carr was questioning whether IT matters. Before that, the research was unequivocal that IT did not matter: remember Nobel laureate Robert Solow’s comment that computers can be seen everywhere except in the productivity statistics? We seem to have crossed into new territory with the Durham report where IT is seen as a key enabler of growth, and as an important ingredient in dealing with the most difficult business challenges.
Somebody should let Nick Carr know...
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