Successful mid-sized firms 'prioritise IT' – study

Medium sized companies bringing in above average revenue and profit growth are more likely to count on IT investments than their lower-performing counterparts, a new report by the Economist Intelligence Unit has stated.

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Medium-sized companies registering above-average revenue and profit growth are more likely to prioritise IT investments than their lesser-performing counterparts, according to a new report by the Economist Intelligence Unit.

Of companies bringing home between $10m and $500m (£5m and £247m) in annual revenues, the more successful firms were found to be study to attach a higher level of importance to IT integration, as well as sales and marketing, plant and equipment, and the outsourcing of non-IT functions.

Dan Armstrong, senior editor at the Economist Intelligence Unit, said it was logical to have found more positive attitudes towards IT integration, as well as other aspects of IT, at companies with higher than average growth in revenue and profitability. “This makes intuitive sense, since meeting additional demand requires strong ties among the customer support, sales, production and finance processes,” he said.

In the report, “Technology and growth at mid-sized companies: the next 10 years”, for which 535 senior executives were interviewed globally, high performing companies also claimed that they saw better returns from investment in IT than in other areas, but said that software investments sometimes disappointed.

A high level of IT integration was another important target for the survey participants. As a result, they believed it was better to buy integrated systems than disparate elements and then to have to tie them together later. But the cost of IT staff and of maintaining applications was substantial, they said.

Stuart Rowe, one of the survey participants and managing director at UK-based online entertainment retailer Play.com, said not being a large company meant the firm could be more adaptable in its IT investments: “As a smaller company ... we don’t have to follow specific policies and can concentrate on the market. It gives us nimbleness and we can use IT to the fullest.” He considered large corporations more likely to be lumbered with legacy IT systems, not to mention long-term relationships with suppliers.

Across sectors, executives pointed out that budgets would be well directed towards customer relationship management software, but apart from that their priorities differed. In the public sector, the main priorities for investment were knowledge management and data warehousing, whereas compliance topped the list for financial services, healthcare and pharmaceutical firms.

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