IT and Your Business
29 May 2014
Posted by: Author: KPMG
Information technology has become a
primary driver for business investments in South Africa and around
the world. But despite the millions spent, KPMG’s research indicates that
senior management is largely unsatisfied with their return on investment.
Research and business interventions by KPMG’s advisory
team in KZN, indicate that organisations are spending increasing amounts of
money on technology without fully reaping or understanding the benefit they
receive from the IT function.
Neo Shabalala, director of management consulting at
KPMG, says that despite the importance of IT in most organisations and
significant IT investments intended to boost the organisation’s agility and
performance, senior leadership in many organisations remains unsatisfied.
”Executives complain that the implementation of information technology
solutions takes too long, costs too much, and does not keep pace with quickly
evolving strategic business goals,” she comments.
"Many organisations develop a range of individual IT
solutions in response to localised needs and more often than not, they are
independent of the organisation’s overall corporate strategy”.
In many cases, business processes are unknown,
information is unreliable, and vertical information systems are created rather
than integrated platforms for business execution.
Shabalala stresses that overcoming the problem is not
a matter of simply adding more technology. The objective is to realise more
business value from their IT organisations and assets so that IT contributes
more directly to the goals of the business.
"The way to ensure that an organisations
technology supports their corporate objectives is through IT strategy. IT
cannot operate solo. It is an enabler designed to ensure that organisations
deliver services effectively. It cannot do this unless the IT systems and
products are driven and mandated by business goals.
The following benefits are realised when IT Strategy
is effectively implemented and maintained:
improvement of business and IT alignment
- Increase in understanding of the business and IT
- Clarity of where and how IT contributes to
accomplishing business goals
- Value is gained from IT spend
- Forged shared vision and mission throughout the organisation
- Improvement in the performance of the IT function
- Improved IT enablement of business
- Improved delivery of IT service quality
- Improved stakeholder communication
- Improved trust between IT and the business
- Lower cost
- Increased alignment of IT investment towards strategic goals
- Improved return on IT enabled investment
- IT risks are managed in line with the priorities and appetite of the
- Improved management of business related IT projects
- Improved management of information as it
is managed on the same level as other resources such as people and finance
- Improved IT resilience and agility to learn and adapt to changing
- IT is executed in line with legislative and regulatory requirements
Shabalala warns that if a business does not
have alignment, the risk is that IT will be operating alone and systems will be
procured that will not be used.The bottom line according to Shabalala is return
on investment. "If you are going to buy and implement a system, you want direct
return on investment in terms of efficiencies”.
Her advice is to utilise an independent
provider who conducts a gap analysis to clearly understand the needs of a
business and its people in order to help source applications and system to
enable optimal efficiencies and secure a competitive advantage for that