In today's fast-paced business world, the ability of an IT organization to deliver new tech capabilities and update existing ones quickly and cost-effectively holds the key to success. Our latest research sheds light on this crucial aspect and reveals some fascinating insights.

Discover How IT Productivity Transforms Your Bottom Line

Insight #1: Time-to-market - The Crucial Metric for IT Productivity

When evaluating IT productivity, time-to-market emerges as the most significant metric. It shows a strong correlation with higher profit margins, being three times stronger with revenue growth and seven times with employee satisfaction. High-performing IT organizations complete medium-size change requests in just 2-4 months, while less-advanced peers take up to a year. This highlights the importance of speed in delivering value. For example, a major e-commerce company that streamlined its change request process saw a 30% increase in revenue within six months. Such a rapid time-to-market allows them to stay ahead in the competitive market and meet customer demands promptly.Another factor closely aligned with better business performance is a higher share of IT investment relative to revenue and a higher frequency of production releases. High performers make monthly updates to core applications, while conventional peers update quarterly. This indicates that investing in technology and keeping it updated leads to better business outcomes.

Insight #2: Three Critical Delivery Capabilities for High Profit Margins

Cross-functional delivery plays a vital role. Teams composed of 20-40% business professionals and subject-matter experts have higher profit margins. For instance, a software development firm that restructured its teams to include more cross-functional members witnessed a 25% increase in profit margins within a year.Low vendor dependency is another key aspect. High performers rely on internal IT resources for over 90% of their applications, while conventional companies use vendors for 40% or more. This gives them more control and flexibility, reducing costs and improving efficiency.A high share of workloads on public cloud also contributes significantly. Leading companies have more than 30% of their workloads on public cloud infrastructure, enabling them to scale quickly and respond to market changes effectively. A global manufacturing company that shifted a significant portion of its operations to the cloud saw a 20% reduction in IT costs and a 15% increase in productivity.

Insight #3: Three Practices for Improving IT Productivity

Improving developer journeys and engineering practices can lead to substantial productivity gains. In one large financial institution, by removing manual processes and adopting CI/CD practices, the delivery capacity doubled in two years. This not only saved time but also improved the quality of products.Embracing a product and platform operating model empowers teams to work at scale. A leading retail company that adopted this model saw a 40% reduction in time-to-market for new capabilities and a 30% decrease in expenses related to legacy applications.Decoupling core-system capabilities is crucial for facilitating greater cloud adoption and operating model maturity. A bank that decoupled frequently changing capabilities into cloud-based microservices was able to increase the number of releases per year from 4 to over 10,000 and reduce time-to-market to just hours for small changes.

Insight #4: The Return on Investment in IT Productivity

Increased technology maturity can unlock almost 30% additional value through productivity gains. On average, organizations can expect a 24% reduction in total IT spend, with some industries like travel and logistics seeing up to 34% higher marginal returns. The real value lies in reinvesting these savings into further IT advancements, positioning companies for sustained growth. For example, a manufacturing firm that invested the savings from improved IT productivity into research and development came up with a new product that increased their market share by 20% in a year.In conclusion, understanding and implementing these insights can help IT organizations enhance their productivity and drive business success. Each organization needs to customize these strategies based on its unique context, but this research provides a valuable framework for evaluation and prioritization.