There’s an upturn in the economy, bolstered by resumption in corporate activity, low interest rates and benign inflation in some European quarters. But there is still enormous pressure on IT costs. Corporates, still smarting from the year 2000, the burst of the technology bubble and zealous cost cutting over the past two years, are reluctant to invest heavily in IT without evidence of payback. Investors, meanwhile, driven by market volatility, are calling for greater transparency on where and how IT adds value to the business.

Some believe that talk of the strategic value of IT is over-hyped whilst others counter with a warning that companies which do not invest in IT are will lose their competitive advantage. But is deriving strategic value from IT really about spending less or spending more? Deloitte Research argues that the key to IT optimization lies beyond the types, uses and cost of technology, in the governance models used to manage and integrate IT within the business. In short, it is not what you spend but how you govern IT that unlocks the value code.

In discussions with a cross-section of European businesses, we determine that IT governance – how IT is linked to the business and the CIO’s role in translating the IT investment needed to underpin the business strategy determined in the boardroom – can simultaneously address business growth and cost optimization.

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