Companies that reduced IT complexities were able to realize average annual benefits of $83 million, according to a new study released this summer from IDC titled Simplifying IT to Drive Better Business Outcomes and Improved ROI, sponsored by Oracle. Those companies also achieved other benefits including faster time to market, better customer service, and the ability to reallocate IT staff to more strategic projects.
Conversely, the study found that IT complexity leads to lower profits and curbs an organization’s ability to innovate and grow. For the IT department, challenges due to complexity include increased operational costs, reduced staff productivity and reduced ability to provide high levels of service to the business.For the business, IT complexities lead to lower profits, less innovation, reduced customer and user satisfaction and less competitive advantage.
Companies who participated in the study were able to realize annual benefits of $3,610 per user through their IT simplification initiatives. The average company studied has approximately 23,000 IT users, which translates into annual benefits of $83 million.
Efforts to simplify IT included:
- migrating to the cloud
- investing in engineered systems
- replacing legacy systems with modern applications
- and other steps
Most participating organizations found that to truly simplify IT, they needed to replace their outdated infrastructure with a simpler, consolidated, modern foundation that was better equipped to address today's demands.
The study also found that IT simplification drives a number of non-dollar benefits, including improved user productivity, faster time to market, and better customer experience.
“Many companies today are overwhelmed by the cost and competitive disadvantage that IT complexity can create,” says IDC’s Group VP, Software Business Solutions, Michael Fauscette. “By simplifying their IT infrastructure, organizations can devote more of their focus and resources to delivering innovation, driving productivity and keeping customers happy.”
“From the boardroom to the IT department, it is clear that battling complexity is a never-ending challenge organizations today must address,” said Oracle SVP and Chief Communications Officer, Bob Evans. “Many of our customers are tired of doing all the integration work themselves, so they are investing in systems that are engineered to work together. Or they’re migrating to cloud services that work well with each other. Those companies are spending less time and money on integration and maintenance, and more on innovation, so they are better positioned to compete and succeed.”
Methodology: The findings are based on in-depth interviews with senior business and IT executives in nine separate enterprises that span a variety of industries, including financial services, e-commerce, medical/life sciences, retail, defense/aviation, and government. The interviews also spanned a number of geographic regions, including the US, Europe, and Latin America.
