IT: Invest Now, Prosper Later

AMR sees firms investing in technology now as leaders when economy picks up

Boston  September 26, 2002  Despite the two-year cyclical downturn in information technology (IT) spending, companies making select technology investment have been able to operate with reduced overhead, deliver products with increased speed and stabilize costs and/or improve profitability by focusing their investments and leveraging technology, according to a study by technology consultancy AMR Research.

AMR announced the results of its study, conducted over the past year, even as it said this week that it has realigned its research and analysis around the theme of "the performance-driven enterprise," with a research model centered on nine business-defining initiatives and designed to identify the areas in which successful companies are investing to achieve higher returns, lower product and overhead costs, and improve customer service.

According to the consultancy, the successful companies have several characteristics in common: clearly defined operations metrics, focused revenue initiatives, and proven ability to drive costs through the application of technology.

These companies are intensely focused on performance and execution, AMR concluded, and they use IT spending as a way to ensure strategic business advantage. AMR said it believes these companies will accelerate into the next upturn, taking significant market share from those that hobble out of the downturn.

"In this challenging economy, the companies that ultimately succeed are intensely focused on corporate performance and execution," said Tony Friscia, president and CEO of AMR Research. "Rather than spend on IT to keep up, these companies are looking for ways to gain competitive advantage."

Friscia added that AMR has recognized that IT spending is linked to a key business initiative and is driven by a line-of-business or functional executive with the support of the IT organization. "Our expertise lies in the intersection of these areas, and that intersection is the force behind the performance-driven enterprise."

The firm's research agenda will concentrate on the following nine business areas that drive company performance: customer fulfillment, sourcing and procurement, supply chain management, product lifecycle management, human capital management, demand and revenue management, service lifecycle management, enterprise performance management, and strategic applications and technology infrastructure.