Executive Summary

For the first time we have identified statistical links between investments in new technologies and key business enablers to show what makes firms more competitive.

Firms are investing a greater percentage of their total ICT budget on mobility, cloud-based services and collaboration tools and this percentage is expected to grow.

Over the next two years, global investments in mobility, cloud-based services, and collaboration tools will increase significantly. The percentage of total ICT budgets dedicated to these technologies will grow as follows:

  • Mobility is expected to increase from 14% three years ago to 24% two years from now (a growth of 71%);
  • Cloud-based services are expected to increase from 11% to 26% (136% growth); and
  • Collaboration tools are expected to increase from 15% to 20% (25% growth).

In Europe, investments in new technologies will continue to accelerate over the next two years. Survey data show the average investment in mobility as a percentage of the total ICT budget will increase from 12% three years ago to 20% two years from now (66% growth); cloud will almost double from 12% to 23% (92% growth), and collaboration will only rise slightly, from 16% to 17%.

In Asia-Pacific, firms are investing a much greater percentage of their total technology budgets in new technology, and expect to grow those investments more quickly. The average investment in mobility as a percentage of the total ICT budget will grow from 17% three years ago to 31% two years from now (82% growth); cloud will more than double from 12% to 30% (150% growth), and collaboration will increase from 18% to 26% (44% growth) – surpassing all other regions.

Although investing more in technology is important, our research finds it is insufficient for enhancing competitiveness.

The evidence shows that to be competitive and maximize the return on these investments in new technologies, businesses need to be better prepared on certain broad “key business enablers.”

When firms have strong key business enablers and invest more in new technology, the probability of becoming competitive can double.

When firms with weak key business enablers make significant investments in new technology, they do not increase the likelihood of better performance and essentially risk wasting their investments in new technology.

The four key business enablers that support technology investment:

  1. Business involvement in technology investment and management decisions;
  2. Access to technology-focused talent;
  3. Access to management-focused talent; and
  4. Digitized platforms – the extent to which the technology, business process and data components are standardized, shared and integrated. We have called this “digital maturity”.

Digitized Platforms

While investing in technology over time, a business tends to accumulate a host of applications and digitized business processes, along with added infrastructure and data. This accumulation eventually becomes the organization’s digitized platform.

When the components of a digitized platform have been accumulated in a coordinated and orderly fashion, with technologies, processes and data standardized and shared across business units, the organization has a “mature digitized platform.” But when this accumulation takes place in an uncoordinated and disorderly fashion, the organization has an “immature digitized platform.”

A very strong, direct statistical link has been identified between digitized platform maturity, new technologies and competitiveness.

Firms that have mature digitized platforms and invest in new technologies can double the likelihood of being competitively agile compared to firms with immature digitized platforms that make similar investments.

For example, 74% of high investors in cloud with mature digitized platforms were competitively agile. In contrast, high investors with immature digitized platforms were no more likely to be competitively agile than low investors in cloud.

Firms should strengthen key enablers – particularly achieving and sustaining a mature digitized platform – to increase the likelihood of obtaining better performance from new technologies and to decrease the risks of wasting their ICT investments.

Firms with immature digitized platforms can significantly enhance their competitiveness by ensuring that investments in new technology go hand in hand with the organizational changes necessary to achieve and sustain a mature digitized platform.

Sustaining a mature digitized platform is challenging as it requires continuously balancing the immediate demands of business units and project teams with longer-term enterprise-wide demands. Firms with mature digitized platforms need to ensure investments in new applications are linked to enterprise- wide resources such as the digitized platform.

European policy makers can help firms mature an increasingly important aspect of their digitized platforms more rapidly by creating and harmonizing policies and regulations that facilitate the storage and flow of data in a stable, seamless, and secure way.

Policy makers can also help firms define, access and foster talent to make the most of their investments in technology by coordinating industry and universities to ensure demand for key skills is clearly defined and supply for key skills matches demand.

The findings in this report build on previous research from Oxford Economics, in collaboration with AT&T, which showed a link between investment and ICT and productivity growth. The report showed that there were differences in productivity growth between the US and countries in Europe and Asia, often due to the different regulatory environments in those countries. Put simply however, ICT drives productivity and growth in developed countries.

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