Study confirms CIOs struggle to effectively measure, maximise, manage IT services in support of business objectives

Despite 33% of IT decision-makers reporting that their companies` C-level executives rank the improvement of product and/or process quality as among IT top priorities today, only 15% of Global 2 000 IT executives described their organisations as very successful at ensuring applications and the business processes they support meet service level and business goals, according to a study commissioned by Mercury Interactive Corporation and conducted by Forrester Research of Cambridge, Massachusetts. This number dropped to 5% for organisations over $10 billion in annual revenue.

The study, which was conducted during August and September of 2002 and included 122 senior IT executives from mid-size and large companies in the US and Europe, also found that while 30% of the IT executives believe their organisations are very successful at testing the quality of applications before deploying them, only 16% believe they are very successful at optimising the performance of applications and the business processes they support while they are in use.

Also, 41% of organisations using existing commercial software solutions for measuring IT performance still have no means for tracking - or they must estimate the extent of - their most serious IT problems, and a full 70% recognised the need to find new solutions to help them achieve their testing and optimisation objectives.

The difficulty of correlating IT performance with line of business goals was further underscored by the fact that only 25% of the IT executives said their organisations did very well at defining and measuring the IT performance of automated business processes against service levels that matter to business. And the IT executives ranked all of the following as "huge" challenges: integrating IT into business processes (35%), moving from a reactive to proactive business role (37%), keeping their top projects on course (34%), ensuring IT plans support business needs and strategies (34%), and evaluating how total IT performance affects business performance (29%).

"The CIO Technology Management Survey reveals that despite gains made in network infrastructure reliability, CIOs recognise they still need help to ensure effective detection, correction, and prevention of problems with the complex applications running on that infrastructure," said Amnon Landan, president, CEO and chairman of the board at Mercury Interactive. "These organisations clearly want to ensure their IT infrastructures contribute to the organization`s business goals, deliver on service level agreements, and reduce waste. IT has been seen as a service arm, but must now also be seen as a business and run as a business. The next five years for IT will be about restructuring processes and realising value as they do more with less."

The need to control IT costs and eliminate waste was apparent in the study as nearly 50% of IT executives said their top priorities were lowering overall costs or improving product and/or process quality and 51% plan to transform IT into a service-driven or business-centric model over the next two years. Fully 83% plan to upgrade existing applications to new versions over the next two years and 54% plan to purchase new applications. Business availability is also becoming an increasingly important challenge as organisations plan a very large or somewhat of an increase over the next two years in their use of automated systems for customer-facing applications (70%), back-office applications (63%) and operations (57%).

A key conclusion that should be drawn from the study is that the complexity of applications, including the way they are now distributed and disconnected across IT networks, is a key contributor to the difficulty of aligning IT with line of business goals. This problem is compounded as the rise of remote access and the advent of Web services increasingly make one organisation`s application performance dependent on the performance of other IT infrastructures.

"The overwhelming need on the part of IT executives results from fully recognising the need to align their IT systems with business goals while lacking the solutions to effectively support this approach," said Landan. "They know the only way to maintain their competitive-edge is by continuously improving their applications and infrastructure so their organizations are better able to reach their business objectives and guaranteed service levels. Mercury Interactive`s BTO initiative, with the introduction of our Optane suite, meets this challenge by enabling IT to measure, manage and continuously improve its alignment with line of business goals. With Optane, IT can measure quality and performance in business terms at each stage of the application lifecycle, from pre-deployment testing to post-deployment management."

Conducted between 10 August and 15 September 2002, the Forrester study was designed to assess C-level priorities for IT investment and the current pain points for IT departments. The results were based on phone surveys given to 87 IT executives in North America and 35 IT executives in Europe. Eleven percent of the executives represented companies with annual revenues less than $500 million, 34% represented companies in the $500 million to $1 billion range, 39% represented companies in the $1 billion to $10 billion range, and 16% represented companies over $10 billion.