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Tech: Spending Wisely, Not More


The CEO's Tech Toolbox

Tech's "Dearth of Innovation"

Tech: Spending Wisely, Not More

"The Door Is Unlocked" for CIOs

Slide Show: Tech for the Chief

What's the secret to using technology for boosting your company's revenues 30% faster than your peers? One thing you might want to consider is changing your attitude toward information technology.

It's not the size of the tech budget that counts. What matters, according to a new study commissioned by telecom-gear maker Juniper (JNPR), is how you approach IT use. The study, which involved interviews with 560 companies (most of them non-Juniper customers) with more than $100 million in annual revenues and based in 10 countries, indicated that businesses with certain IT-related characteristics showed higher revenue growth of 12.7%, vs. 9.8% in 2003. The gap widened even further in 2004 and 2005, according to the study.

What did these businesses do differently? They didn't spend more -- the tech budgets of these dynamic leaders, which comprised fewer than 25% of the companies interviewed, weren't higher than others. Instead, the difference seems to be strategic. "[These companies] aren't necessarily looking at spending more money on IT, but on spending the money more wisely," says Brett Sharp of market researcher TNS in London, which conducted the survey for Juniper.

BITE-SIZED PIECES. These successful outfits typically support more mobile workers, the use of Web services (allowing various Web sites and applications to connect to one another), and an Internet protocol (IP) network. An IP network allows users to make voice calls and send data over the Internet. All these technologies can rev up a company's productivity and cut costs.

More important, tech projects were simply managed better at these businesses. The fast growers had 45% more IT projects going on at a given time than the slow growers (eight vs. five or six). And instead of implementing, say, five very large IT initiatives, taking years to complete, the go-getters broke their projects into little bits. That way, an IT project's success or a failure became apparent sooner, and the endeavor could be tweaked.

WINNING CHARACTERISTICS. The study singles out tech leaders such as the MGM Mirage (MGM) hotel and casino and biotech concern Serono (SRA), both of which have information networks that have to be highly flexible and reliable for their businesses to be able to function. At Serono, 25% of the company's 4,900 employees work remotely. MGM Mirage, meanwhile, needs 24/7 real-time processing of gaming transactions and guest comings and goings.

So what exactly do these tech standouts do that's different from their peers? Turns out, these companies and other leaders are:

100% more likely to be striving towards greater efficiency, with 64% pursuing both cost reduction and IT consolidation projects in the next 12 months.

Expecting 57% online traffic growth. Average increase expected by the group worldwide for 2005 is 64%.

30% more likely to have mobile workers.

23% more likely to have employees working from home.

35% more likely to agree that their businesses are highly dependent upon real-time transactions

30% more likely to be intolerant of technology outages that last longer than 30 minutes.

30% more likely to implement a comprehensive security strategy.

17% more likely to have projects to eliminate all non-IP (Internet protocol) data movement from their networks. Essentially, they're striving to cut costs by making all their calls and sending all their data via the Internet.

18% more likely to use the Web to deliver applications to workers and departments across the company.

In the process of implementing 45% more IT projects. By Olga Kharif in Portland, Ore.

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