What’s at Stake With IT Failures? Business Operations, IT Reputations, and a Lot of Money

As a CTO with 35 years of experience in IT, I know the value of technology performance. I understand how failures, slowdowns and interruptions can hobble a business and hurt the bottom line. Or at least I thought I understood. New information from a study my company recently commissioned has opened my eyes to just how costly IT performance issues can be, and how deeply damaging they can be across an organization.

What I love about this study, “Measuring the Business Impact of Technology Performance,” is that it isn’t focused on e-commerce. Instead, it gathered input from companies across the brick-and-mortar business spectrum – finance, retail, healthcare, manufacturing. This is so important because today technology is a vital part of every business, not just web-based businesses. Even more interesting is that it surveyed Line of Business (LoB) executives and IT leaders. This perspective allows us to see how differently those two groups view the influence of technology on a business.

The Numbers Tell the Story

The good news is that, although they ordered them a little differently, IT and LoB both have the same priorities when it comes to technology investments. They listed the top three as follows:

  • Increase speed of manufacturing and production.
  • Increase speed to market/to the consumer.
  • Ensure product/service quality.

The answers are a perfect example of how IT performance issues will impact a business across the board. This point is highlighted again in the study when respondents were asked which areas of their companies they would describe as “critically dependent” on technology operating efficiently. Of the 11 areas listed as options, 10 of them received what I would consider high scores from both groups. But this question also brings to light an important area of LoB/IT disconnect:

“While IT and LoB executives are in agreement with regard to the most ‘critically dependent’ areas, operational aspects such as supply chain, manufacturing and shipping/ receiving are considered more critically dependent on technology by IT executives.”

I believe this stat reveals two things: That IT is becoming more and more integrated into the business, and that IT needs to better communicate the ROI of technology failure avoidance and performance to LoB executives.

Here’s another example of how differently IT and LoB can perceive technology issues, seen through the prism of what it means to be “back to normal” after an IT failure.

How long did it take to get back to normal operations?

  • LoB executives said 24 days
  • IT executives said 11 days

That’s the definition of “disconnect,” and a huge red flag for anyone who’s concerned about IT’s reputation with the c-suite. Here are three more stats from the survey that aren’t helping perceptions of IT:

  • 80% of respondents say major technology performance issues are recurring.
  • 75% say issues are persisting or getting worse.
  • 48% say these issues are occurring several times per week to every day.

Building a better reputation for IT is going to demand strong technology advocates with access to LoB executives and the C-suite. A thriving company by definition must have a thriving and respected IT department.

What are these technology performance failures costing businesses? LoB and IT executives’ averaged response for a single technology failure, the short-term costs related to operations, sales and marketing are significant: $10.8 million, on average.

I’ve been in the technology business for more than three decades. I help customers think about technology performance and how it impacts their infrastructure and their business, and while many of the findings were validation of what I’ve long advocated, even I was surprised by a number of the figures in the study.

Finding Opportunity in Complexity

Technology has become a foundation for business — it supports everything from R&D and manufacturing to sales and customer service. That makes for a lot of moving pieces. Plus, today’s customers and employees have far more influence and power than ever before, so IT is no longer just a back-office issue — it’s in the back, in the middle and out front driving revenue.

What this all means is that today’s CTO needs to advocate for a complete technology performance strategy. Half measures won’t cut it — not when other companies are investing in disruptive technologies that will give them an edge, both at the enterprise level and with customers. And that advocate needs to be a change agent, someone who can break down silos, someone who understands why IT and the business need to come together in ways that will benefit both. Because, let’s face it, things aren’t going to get less complex from here.

Paul Czarnik is Chief Technology Officer at Compuware.