No matter the quality of the hardware, software or personnel, the world's leading companies aren't living up to their potential because technology still isn't properly yoked to management, a new study found.
Sponsored by Juniper Networks Inc. (NYSE:JNPR), the No. 2 provider of Internet equipment, 474 information technology executives, most of them at the senior level, were surveyed by the Economist Intelligence Unit.
To be sure, Juniper, of Sunnyvale, Calif., has an obvious interest in selling products and software to many of these same executives. But Bask Iyer, Juniper's chief information officer, said the company viewed it as a sort of wake-up call to management.
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“Not all companies get” that the information technology department has to be “joined at the hip” to their parts of the enterprise, including the CEO and CFO's suite, communications and marketing, Iyer said.
In the contemporary environment of networked communications plus instant word-of-mouth conducted by cable TV and billion-member websites like Facebook (NASDAQ:FB), companies that aren't technologically integrated could be harmed, he said.
The former CIO of Honeywell International Inc. (NYSE:HON), said the survey found too many discrepancies for comfort. Among them:
About 72 percent of respondents said the IT department is a growth driver. But only 19 percent said it helps pinpoint customer needs; 20 percent said it “rarely, if ever” helps to devise new products; and 28 percent said it “rarely, if ever” helps develop a new product or service.
Through 2016, though, about 38 percent of respondents said the information technology group will be involved with development. That looks like a tall order because only 5 percent said IT is involved now in new product development and 6 percent said it's helping identify new business opportunities.
Iyer said that having only recently moved to the West Coast, he believes some East Coast U.S. enterprises may be more thoughtful now about deploying IT than others in the West, in part due to more careful observation and peer monitoring.
The EIU survey also highlighted some apparent successes, both in California companies.
PG&E Corp. (NYSE:PCG), the San Francisco parent of Pacific Gas & Electric, is one, because it involved internal IT in corporate business improvement over several years and successfully merged information technology practices with its other business.
Another is Google Inc. (NASDAQ:GOOG), the No. 1 search engine, of Mountain View, Calif., which involves the IT function in all aspects of its business planning.
Juniper's Iyer held up the method Google uses for planning as one for all enterprises. Rather than be advised by a CFO of a specific annual budget, the IT department at Google works with the CEO and CFO to say, “These projects need to be done” and get funding as part of overall planning, he said.
At Juniper, where he's worked about 17 months, Iyer said he's already implemented changes such as reducing the number of steps for order processing from as many as 150 -- to one.
Shares of Juniper closed Tuesday at $18.02, up 14 cents. They're down nearly 10 percent for the year, though, and nearly 44 percent since Iyer's appointment.