We surveyed 300 managers at IT services and software companies in the UK, US and Australia to map out where they see opportunities for growth and efficiency in 2012. The results blew us away.
Early this year we released the results of an ambitious survey we commissioned from an independent agency (Loudhouse Research) into the inner workings at IT services and software companies; the report was called "Managing Growth: A review of the global software & IT services industry".
Get neutral feedback from finance managers and resource planners into the links between financial and operational data, management systems and their companies’ performance, at a crucial time for the IT services and software industries.
Findings from the IT Services and Software report
The report highlights an upbeat mood in the IT services and software industries; despite (or perhaps, because of) general economic malaise, these companies’ efficiency-driving products and services are in high demand. But there are clear differences between the most successful companies in these industries and the underachievers. The report states:
"Achieving growth and successfully managing company priorities is currently threatened by an inefficient use of resources, lack of reliable data, and a lack of integration between differing departments and processes."
"The research finds clear links between the presence of real-time analytics and highly integrated back-office functions and the overall profitability of the organisation."
Profitability and use of real-time financial data
In fact, the survey demonstrated a clear link between IT services and software companies’ access to real-time financial data and increased profitability. Seventy percent of those that used and analysed real-time financial data grew more profitable in 2011, while only 47% not using the data grew in profitability.
Integration between operations and finance
Among the survey’s respondents, a heartening 60% cited a high level of integration between financial systems and operations. However, there’s a worrisome discrepancy. From the report:
"70% of finance professionals reported full integration between their department and the operations function, while only 49% of operations professionals reported full integration with finance."
Clearly, views from each side of the finance and operations fence differ.
Other findings from the report
The IT services and software survey included approximately 20 questions, and the results provide a comprehensive snapshot of the management capabilities that differentiate top performers. Some of the kinds of responses analysed in more detail in the report:
- The degree of integration of different business systems relative to each other —financials/ERP, professional services management, ecommerce and CRM
- The link between systems integration (financials and operations, as well as sales and non-sales) and profitability
- The availability of real-time financial data in different data categories
- The level of reporting maturity, in terms of access to real-time data and analytics for different departments (versus manual spreadsheet reporting)
- The rate of adoption of cloud or Software-as-a-Service solutions for core business functions.
The 10-page global software and IT services report is currently available free of charge from the NetSuite site. Particularly if you’re an IT services or software company in the US, UK or Australia, this report is a great way to benchmark your performance.