IT team carrying out an operations model.
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In today’s challenging and unpredictable macro-environment, IT leaders are facing pressure to improve operational efficiency and manage data better. The pressure is so great that many tech leaders are significantly more focused on those two areas than customer growth or driving innovation, according to a new study from the Qualtrics XM Institute.

In fact, 60% of IT leaders said improving operational efficiency in their IT organization is a “critical area of focus.” Only 39% said customer growth and retention is a critical area of focus, and 43% said driving innovation is key.

IT leaders also see improving data management as a key area of focus. Half of respondents cited ‘improving data quality and management’ as a critical area of focus. It’s a top three area of focus for IT leaders in Brazil, France, Germany, the U.K., and the U.S.

Meanwhile, just 23% of respondents said that preparing for an economic downturn is a critical area of focus.

SEE: Best data governance practices for your organization (TechRepublic)

Correlation between employee satisfaction and engagement

Qualtrics’ research showed that IT can be a key driver of employee engagement, but less than half of IT leaders said employee satisfaction is a critical area of focus.

Employees who said that their technology is enabling productivity are 158% more engaged and have 61% higher intent-to-stay beyond three years, compared to those who don’t, according to another Qualtrics’ study from earlier this year.

Companies with above-average revenue growth versus their competitors were significantly more focused (50% versus 42%) on employee satisfaction, the October 2022 report from Qualtrics found.

Increasing IT budgets correlate to revenue growth

Interestingly, even with budget cuts, the study found that IT leaders around the world expect their budgets to increase as they work to help companies become more prepared for the unknown. Companies with high revenue growth versus their competitors were 16% more likely to be focused on the unexpected.

Most IT leaders expect their IT budget to increase compared with the past year, and just 2% expect their budgets to decrease, according to the report. Sixty-five percent of respondents expect to increase their IT headcount, and just 3% expect to downsize their IT team.

Critical areas of focus for IT leadership by revenue growth

Not surprisingly, the research found that organizations with, at or below-average revenue growth are more likely to say that “reducing operational costs across the company” is a critical area of focus than those with above-average revenue growth.

And organizations with above-average revenue growth are most likely to cite “improving operation efficiency within IT” (63%) and “improving data quality and management” (53%) as critical areas of focus for IT leadership, according to the report.

Overall, the top five critical areas of focus for IT leadership in the next year are:

  • Improving operational efficiency within IT
  • Improving data quality and management
  • Improving employee satisfaction with IT platforms and operations
  • Consolidating IT platforms and systems
  • Driving innovation across the organization

The need for speed and adaptability

Agility is another area of focus, with 89% of the respondents saying that it’s “extremely” or “very important” for their organization to improve its ability to respond to unexpected events. Over 70% of respondents said their organization needs to “significantly” or “moderately” make changes to their products and services, customer interactions, brand messages and employee interactions.

SEE: Data literacy: Time to cure data phobia (TechRepublic)

Respondents were also asked to what degree do they feel their company will need to make changes when thinking about the environment over the next few years. Forty-two percent said it is “significantly” important to adjust the products and services that they offer, while 40% said it is “significantly” important to adjust how they interact with customers.

Improving experiences and building XM capabilities are also important

More than 80% of respondents said that it is important for their company to improve the experience they deliver for each experience area. Over half of respondents said that it is very important for their organization to improve their customer experience.

Mexican and Australian respondents are the most likely to say that it is important to improve XM, or experience management, capabilities over the next few years, at 93%.

Japanese respondents are the least likely to say it is important to improve XM capabilities (75%). Among U.S. respondents, improving XM is “slightly important” most frequently, at 7%, according to the report.

IT is very much involved: 39% said their IT organization will be “very significantly involved” in helping their overall company improve its experience management capabilities over the next two years, while 40% said IT will be “significantly” involved.

Looking ahead, respondents are slightly more likely to agree that XM will be an important capability for IT organizations in the future than they are to say that XM will play an important role in their professional success.

The most significant obstacles to the company’s XM efforts  include “lack of clear strategy” (32%), “technology limitations” (30%) and “lack of critical skills” (30%).

Details about this Qualtrics study

The findings are from a survey Qualtrics XM Institute conducted of 663 senior IT leaders at companies with 1,000 or more employees about their XM efforts in Q2 2022 in Australia, Brazil, Canada, France, Germany, Japan, Mexico, Singapore, the United Kingdom, and the United States.