Many companies, with a little effort, can achieve significantly greater returns from their technology investment, says consulting firm Accenture.
Writing in the latest issue of the firm`s Outlook journal, Bob Suh, managing partner leading strategy for Accenture`s global Technology & Outsourcing business, says most executives are convinced that returns on infrastructure investments have been poor.
"To some extent, this is true, and the executives` attitude is understandable," he writes. "As new Web-based and enterprise applications were approved in the past 10 years, a significant part of the new project costs required infrastructure."
This includes new Web servers, security software, networking equipment and desktop upgrades.
"Many of these upgrades have now been made, however, which means the returns on future projects will be higher.
"Although newer technologies will require some additional investment in infrastructure, most companies will be leveraging significant prior investments. And increasing the number of applications leveraging the infrastructure will raise firms` returns on their invested capital."
Suh says an Accenture study shows that companies with the best earnings growth reinvest "up to 10% or more" of their technology budgets on upgrading to newer technologies than do their counterparts with average earnings growth.
"Operating in a virtuous circle, these high-performing companies create the conditions necessary for continued superior earnings growth and competitive advantages."
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