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Innovation in European IT

Increasingly, the European IT decision-maker is facing a complex landscape, where they are tasked with juggling both their traditional roles as administrators and reactive problem solvers, and also being expected to drive innovation resulting in greater business success and market differentiation. 

Without unlimited resources, IT leaders have to manage their departments wisely to innovate cost-saving solutions without reducing business effectiveness. However, IT departments are still mainly functioning as administrative centres, unable to give innovation the attention that it needs. When leaders fail to get the balance right, the IT departments inevitably decline into a decreasing cycle of effectiveness and value for money, often becoming more expensive than is sustainable.

Obviously, the day-to-day IT is vital to the success of a business, but to actually grow and thrive in the long term, businesses need to innovate and find ways to integrate and apply technology most effectively. Across Europe, IT budgets rode by an average of 3% in the last year, and will continue to rise – with this, there will be more opportunity to re-evaluate the placement of resources in order to best move the business forward.

The complexity, however, is rising: constant challenges include skills shortages, data analysis, application management and development, shadow IT, and mobile working are just some of the difficulties encountered in trying to complete an ideal implementation of IT in business. How IT leaders and services providers respond to these challenges today will affect not only their businesses, but also their national markets and the European economy in the longer term.

By establishing relationships with trusted IT services providers who have expertise in their respective fields, IT departments can concentrate on the things that they excel at and which will truly help them differentiate their business in the long-term. However, it is the responsibility of the IT services providers to prove that they are the right option for IT departments, providing guidance and working in ways that are best suited to each individual business.

United Kingdom

Within the UK, IT decision-makers seem to be struggling to keep pace with the rate of change, and rely heavily upon IT services providers for support. In fact, the UK leads Europe in the percentage of companies who work with IT services providers for more than three of their tasks. Interestingly, survey respondents in the UK said that the biggest challenge their organisations currently face is security and compliance, but they were far more likely to highlight ‘complexity’ and ‘ensuring that IT is able to support a fast-changing business’ as challenges, compared with the European average.

Throughout the survey, it becomes obvious that the main casualty in IT departments today is innovation. British IT departments devote just 7% of their time to innovation, instead prioritising general maintenance and responding to user problems. Additionally, respondents from the UK were twice as likely to report technological support of employees as a core function of the IT department, compared with their counterparts in France, Germany, and Spain.

With a picture forming of a busy department torn between keeping day-to-day operations running smoothly and supporting the business in their growth aspirations, it comes as no surprise that UK businesses look towards third-party services providers. The success of this approach demonstrates the strength of customer/supplier relationships in the country: British respondents tended to see their IT services provider as ‘trusted advisors’ or ‘expert guides’ and reported that they were open to being led by their providers.

Benelux

Of all the respondents, it is those from Benelux that appear to be the most comfortable with the use of third parties. Looking to the next five years, these practices are set to grow substantially. If current predictions hold true, the Benelux region will be the heaviest user of IT services providers in Western Europe by 2020.

The primary drivers of this trend towards using third parties appears to be quite practical in nature. Around half of respondents indicated that a reason that they use IT services providers is due to a lack of internal skills – the highest national response rate of its kind – and a problem that is only due to intensify in coming years.

An additional reason may relate to cost. IT budget increases last year were some of the most modest, and the year ahead looks likely to be only marginally better. Against this backdrop, working with IT services providers is eminently sensible.

Regardless of where you are, working with the right IT services providers to alleviate resource issues will continue to help maintain a functional IT department. More importantly, moving towards a more strategic perception of the IT department will ensure that the full potential of both the department and the business is realised.  

Figures taken from Claranet Research Report 2015 'Innovation in European IT'.