IntroductionProductivity – helping our customers aroundthe world be more productive - is at the heartof what we do at AT&T.We have spent a good deal of time exploring<strong>and</strong> trying to underst<strong>and</strong> what makes somecompanies outperform others, <strong>and</strong> the roletechnology plays in that. In 2011 we exploredthe link between business output <strong>and</strong> ITinvestment levels, <strong>and</strong> we saw there was a clearcorrelation between the two.This new <strong>and</strong> original research from INSEADtakes the debate forward <strong>and</strong> aims to answerthe question, “How does a company get themost from its <strong>ICT</strong> investments?” For the firsttime, this report helps businesses answer thatquestion.We don’t expect it to contain all the answersbut we hope you find it useful <strong>and</strong> informative<strong>and</strong> that is helps take the debate forward. Iinvite you to participate in the discussion <strong>with</strong>us at www.corp.att.com/bemoreproductive orsearch for ‘Be More Productive’ to find ourgroup at www.linkedin.com.We hope you enjoy the report.Andrew EdisonRegional Vice President for EMEA, AT&TAs the report reveals, global investment innew information technologies such as cloudservices, mobility <strong>and</strong> collaboration tools willaccelerate over the next few years. We alsoknow from our conversations <strong>with</strong> customersthat businesses look to these new technologiesto reduce costs, drive growth <strong>and</strong> improveproductivity.As the INSEAD research clearly shows however,it is not enough to just invest. Companies alsoneed to strengthen their key enablers – thesupporting environment in which these newtechnologies will be integrated. The mostimportant of these is to prioritize achieving<strong>and</strong> sustaining a mature digitised platform – acombination of a st<strong>and</strong>ardized <strong>and</strong> shared <strong>ICT</strong>infrastructure, the internal business processesof a company <strong>and</strong> the data it generates. Themessage from the research for enterprisesaround the world is clear: put in place strongbusiness enablers <strong>and</strong> double the probabilityof becoming productive <strong>and</strong> competitive; orpersevere <strong>with</strong> weak business enablers <strong>and</strong>see no increase in the likelihood of betterperformance <strong>and</strong> in fact waste your investmentin new technologies.I have no doubt that the dangers of wastinginvestments in new technology is one whichwill resonate among business leaders <strong>and</strong>policymakers alike so I am delighted that thisreport goes some way to helping businessleaders make the right <strong>ICT</strong> investment decisions.4 INSEAD eLab <strong>ICT</strong> Report
ExecutiveSummaryFor the first time we have identifiedstatistical links between investmentsin new technologies <strong>and</strong> key businessenablers to show what makes firmsmore competitive.Firms are investing a greaterpercentage of their total <strong>ICT</strong> budgeton mobility, cloud-based services<strong>and</strong> collaboration tools <strong>and</strong> thispercentage is expected to grow.Over the next two years, global investmentsin mobility, cloud-based services, <strong>and</strong>collaboration tools will increase significantly.The percentage of total <strong>ICT</strong> budgets dedicatedto these technologies will grow as follows:• Mobility is expected to increase from 14%three years ago to 24% two years fromnow (a growth of 71%);• Cloud-based services are expected toincrease from 11% to 26% (136% growth);<strong>and</strong>• Collaboration tools are expected toincrease from 15% to 20% (25% growth).In Europe, investments in new technologies willcontinue to accelerate over the next two years.Survey data show the average investment inmobility as a percentage of the total <strong>ICT</strong> budgetwill increase from 12% three years ago to 20%two years from now (66% growth); cloud willalmost double from 12% to 23% (92% growth),<strong>and</strong> collaboration will only rise slightly, from16% to 17%.In Asia-Pacific, firms are investing a muchgreater percentage of their total technologybudgets in new technology, <strong>and</strong> expect to growthose investments more quickly. The averageinvestment in mobility as a percentage of thetotal <strong>ICT</strong> budget will grow from 17% three yearsago to 31% two years from now (82% growth);cloud will more than double from 12% to 30%(150% growth), <strong>and</strong> collaboration will increasefrom 18% to 26% (44% growth) – surpassing allother regions.Although investing more intechnology is important, our researchfinds it is insufficient for enhancingcompetitiveness.The evidence shows that to be competitive<strong>and</strong> maximize the return on these investmentsin new technologies, businesses need to bebetter prepared on certain broad “key businessenablers.”When firms have strong key businessenablers <strong>and</strong> invest more in newtechnology, the probability ofbecoming competitive can double.When firms <strong>with</strong> weak keybusiness enablers make significantinvestments in new technology, theydo not increase the likelihood ofbetter performance <strong>and</strong> essentiallyrisk wasting their investments in newtechnology.The four key business enablers that supporttechnology investment:1. <strong>Business</strong> involvement in technologyinvestment <strong>and</strong> management decisions;2. Access to technology-focused talent;3. Access to management-focused talent;<strong>and</strong>4. Digitized platforms – the extent to whichthe technology, business process <strong>and</strong> datacomponents are st<strong>and</strong>ardized, shared <strong>and</strong>integrated. We have called this “digitalmaturity”.Digitized PlatformsWhile investing in technology over time,a business tends to accumulate a host ofapplications <strong>and</strong> digitized business processes,along <strong>with</strong> added infrastructure <strong>and</strong> data.This accumulation eventually becomes theorganization’s digitized platform.When the components of a digitized platformhave been accumulated in a coordinated <strong>and</strong>orderly fashion, <strong>with</strong> technologies, processes<strong>and</strong> data st<strong>and</strong>ardized <strong>and</strong> shared acrossbusiness units, the organization has a “maturedigitized platform.” But when this accumulationtakes place in an uncoordinated <strong>and</strong> disorderlyfashion, the organization has an “immaturedigitized platform.”A very strong, direct statistical link has beenidentified between digitized platform maturity,new technologies <strong>and</strong> competitiveness.Firms that have mature digitizedplatforms <strong>and</strong> invest in newtechnologies can double thelikelihood of being competitivelyagile compared to firms <strong>with</strong>immature digitized platforms thatmake similar investments.For example, 74% of high investors in cloud <strong>with</strong>mature digitized platforms were competitivelyagile. In contrast, high investors <strong>with</strong> immaturedigitized platforms were no more likely to becompetitively agile than low investors in cloud.Firms should strengthen key enablers –particularly achieving <strong>and</strong> sustaining a maturedigitized platform – to increase the likelihoodof obtaining better performance from newtechnologies <strong>and</strong> to decrease the risks ofwasting their <strong>ICT</strong> investments.Firms <strong>with</strong> immature digitized platforms cansignificantly enhance their competitiveness byensuring that investments in new technologygo h<strong>and</strong> in h<strong>and</strong> <strong>with</strong> the organizationalchanges necessary to achieve <strong>and</strong> sustain amature digitized platform.Sustaining a mature digitized platform ischallenging as it requires continuouslybalancing the immediate dem<strong>and</strong>s of businessunits <strong>and</strong> project teams <strong>with</strong> longer-termenterprise-wide dem<strong>and</strong>s. Firms <strong>with</strong> maturedigitized platforms need to ensure investmentsin new applications are linked to enterprisewideresources such as the digitized platform.European policy makers can help firms maturean increasingly important aspect of theirdigitized platforms more rapidly by creating<strong>and</strong> harmonizing policies <strong>and</strong> regulations thatfacilitate the storage <strong>and</strong> flow of data in astable, seamless, <strong>and</strong> secure way.Policy makers can also help firms define, access<strong>and</strong> foster talent to make the most of theirinvestments in technology by coordinatingindustry <strong>and</strong> universities to ensure dem<strong>and</strong> forkey skills is clearly defined <strong>and</strong> supply for keyskills matches dem<strong>and</strong>.The findings in this report build on previousresearch from Oxford Economics, incollaboration <strong>with</strong> AT&T, which showed a linkbetween investment <strong>and</strong> <strong>ICT</strong> <strong>and</strong> productivitygrowth. The report showed that there weredifferences in productivity growth betweenthe US <strong>and</strong> countries in Europe <strong>and</strong> Asia, oftendue to the different regulatory environmentsin those countries. Put simply however, <strong>ICT</strong>drives productivity <strong>and</strong> growth in developedcountries.<strong>Building</strong> <strong>Business</strong> <strong>Performance</strong> <strong>and</strong> <strong>Competitiveness</strong> <strong>with</strong> <strong>ICT</strong>5
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