Critical Development Gaps in Many Key Areas
Call into Question IT’s Ability to Meet High Business
Expectations
While IT organizations are making progress with their own
internal digital transformation, they are still struggling to
support the broader enterprise, reallocate the technology
portfolio, implement a more agile technology infrastructure, drive
innovation, and improve customer-centricity, according to 2019 IT
Key Issues Research from The Hackett Group, Inc. (NASDAQ: HCKT).
The research found that IT has limited capability to address many
of their highest priority objectives. In addition, plans to address
these deficiencies fall woefully short, calling into question IT’s
ability to live up to the business expectation to serve as a true
strategic business partner.
A complimentary version of the research is available for
download, following registration, at this link:
http://go.poweredbyhackett.com/keyissuesit1902sm.
IT leaders have confidence in their ability to manage cyber and
data risk -- their top-ranked enterprise- and function-related
priority. But they are insecure about most of the other top
objectives identified for 2019, the research found. The study found
that IT organizations have low capability to address issues in many
other areas ranked as the most important, including: improving
functional agility; improving customer-centricity; improving data
management and analytical capabilities; aligning skills and talent
with business needs; and modernizing data architecture.
The issue is made worse by the fact that IT is severely resource
constrained. The research found that less than 20 percent of IT
organizations report a current or planned improvement initiative in
these areas in 2019. Only one in four is addressing known talent
gaps and alignment issues. Less than 10 percent are working on
modernizing their data architecture.
Looking at budgets and staffing for 2019, IT expects to fare
better than the other business services areas such as finance,
procurement, and HR. Budgets are anticipated to rise by 2.2
percent, and staffing will drop by just 0.2 percent. Spending is
also shifting somewhat, with a significant increase in the
percentage of the budget going to “build” processes such as
infrastructure and application development, and a slight decrease
in spending on “run” processes. But in the context of predicted
revenue growth of 5.7 percent, this still leaves dramatic
productivity and efficiency gaps that must be overcome by continued
gains in operational efficiency.
Digital technology adoption is also on the rise, the research
found, with more than 90 percent of companies showing some level of
adoption for cloud-based applications and a large jump in robotic
process automation (RPA) adoption expected this year. Over the next
two years, IT organizations expect to see dramatic growth in
adoption of a wide array of digital tools and systems, including
RPA, ERP modernization, and data and analytics tools for
visualization, master data management, analytics, and data
architecture.
Despite the challenges, IT’s business stakeholders in finance,
procurement, HR and other areas are optimistic about the function’s
future. Two years ago, only about one third said IT had the
competencies and resources to support them in their digital
transformation. This year, that number has risen to nearly half. By
2020-21, 80 percent of stakeholders say they expect IT to have the
competencies required to be a valued business partner. The question
remains, will IT be able to deliver on this optimistic
expectation?
“IT has made progress on partnering with the business to move
forward with digital transformation. They’re improving, and the
business is seeing benefits,” said The Hackett Group Senior
Director, IT Research Advisor Rick Pastore. “But the low number of
improvement initiatives planned for 2019 imply that IT leaders
simply don’t know how to fix their remaining shortcomings, or
they’re overwhelmed by the breadth and depth of the challenge.
They’re also hampered by legacy issues like infrastructure
complexity, outdated architectures, and project development
approaches that are an impediment to agility. Given IT’s ambitious
goals for the next two years, it’s critical that they find a way to
regain improvement momentum.”
According to The Hackett Group Principal and North American IT
Advisory Practice Leader Lisa Palmer, “IT organizations have been
wrestling with many tactical projects, with business making demands
much faster than IT can respond. So fundamental structural issues
like inefficient legacy processes, skill gaps, and lack of
alignment are becoming more exposed. Making changes in areas like
soft skills, architecture, and culture doesn’t happen overnight,
and it can feel overwhelming. It requires a holistic approach to
reinventing IT. Headway is being made, but it’s significantly
slower than needed.”
The Hackett Group’s 2019 IT Key Issues research, “2019 CIO
Agenda: Developing Critical IT Capabilities,” is based on results
gathered from about 150 executives in the US and abroad, most at
large companies with annual revenue of $1 billion or greater. A
complimentary version of the research is available for download,
following registration, at this link:
http://go.poweredbyhackett.com/keyissuesit1902sm.
About The Hackett Group
The Hackett Group (NASDAQ: HCKT) is an intellectual
property-based strategic consultancy and leading enterprise
benchmarking and best practices digital transformation firm to
global companies, offering digital transformation including robotic
process automation and enterprise cloud application implementation.
Services include business transformation, enterprise
analytics, working capital management and global
business services. The Hackett Group also provides dedicated
expertise in business strategy, operations, finance, human capital
management, strategic sourcing, procurement and information
technology, including its award-winning Oracle and SAP
practices.
The Hackett Group has completed more than 16,500 benchmarking
studies with major corporations and government agencies, including
93% of the Dow Jones Industrials, 89% of the Fortune 100, 83% of
the DAX 30 and 57% of the FTSE 100. These studies drive its Best
Practice Intelligence Center™ which includes the firm's
benchmarking metrics, best practices repository and best practice
configuration guides and process flows, which enable The Hackett
Group’s clients and partners to achieve world-class
performance.
More information on The Hackett Group is available at:
www.thehackettgroup.com, info@thehackettgroup.com, or by
calling (770) 225-3600.
Cautionary Statement Regarding “Forward Looking”
Statements
This release contains “forward looking” statements within the
meaning of Section 27A of the Securities Act of 1933 as amended and
Section 21E of the Securities Exchange Act of 1934, as amended.
Statements including without limitation, words such as “expects”,
“anticipates”, “intends”, “plans”, “believes”, seeks”, “estimates”
or other similar phrases or variations of such words or similar
expressions indicating, present or future anticipated or expected
occurrences or outcomes are intended to identify such forward
looking statements. Forward looking statements are not statements
of historical fact and involve known and unknown risks,
uncertainties and other factors that may cause the Company’s actual
results, performance or achievements to be materially different
from the results, performance or achievements expressed or implied
by the forward looking statements. Factors that may impact such
forward looking statements include without limitation, the ability
of Hackett to effectively market its digital transformation and
other consulting services, competition from other consulting and
technology companies who may have or develop in the future, similar
offerings, the commercial viability of Hackett and its services as
well as other risk detailed in Hackett’s reports filed with the
United States Securities and Exchange Commission. Hackett does not
undertake any duty to update this release or any forward looking
statements contained herein.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190509005553/en/
Gary Baker, Global Communications Director - (917) 796-2391 or
gbaker@thehackettgroup.com
Hackett (NASDAQ:HCKT)
Historical Stock Chart
From Aug 2024 to Sep 2024
Hackett (NASDAQ:HCKT)
Historical Stock Chart
From Sep 2023 to Sep 2024