TechnologyIT investment pays dividends

IT investment pays dividends

Online working practices boost productivity in the workplace by as much as 18%

IT investment has a substantial, quantifiable impact on business
productivity, according to the Office of National Statistics and the London
School of Economics.

While the report highlighted some differences between sectors – use of
technology by service companies generated 14% increased productivity compared
with 10% in manufacturing, for example – it found that all businesses made
‘significant statistical returns’ on IT capital investment.

Networked computers had an even greater effect: employees with internet
access contributed 2.9% in productivity gains, compared with 2.2% for staff
using standalone systems.

But UK businesses still had lessons to learn from their US counterparts. US
multinational subsidiaries in this country experienced an 8% higher productivity
gain from IT investment than domestic UK firms.

More than 80% of this advantage was explained by better use of IT, said the
ONS report.

The research is relevant to both business and government, according to Jeremy
Beale, head of e-business at the Confederation of British Industry.

‘It showed that IT investment and use is a macroeconomic issue, and the
Treasury needs to start looking more systematically at what could be done to
help companies implement good online working practices,’ he said.

‘From a business perspective there is a lesson about how US firms have
learned to use technology and combine that with the optimum business processes.’

The ONS figures confirmed the common sense perception that IT is good for
business, said Beatrice Rogers, e-business programme manager at IT industry
trade body Intellect. ‘This is a chance for the government to put IT at the
heart of policy development, to put these measures in the set of statistics used
to track the economy, and to take decisive action on the UK’s exploitation of
IT,’ she said.

But IT investment by itself is not enough, according to Jim Norton, senior
policy adviser at the Institute of Directors. ‘If you just invest in IT, it does
not help much. Unless you look at the way people use it you don’t necessarily
reap benefits.

‘Multinational US firms lead through a combination of IT investment and
working practices,’ he added.

Related Articles

Is predictive analytics the end of the annual audit?

Audit Is predictive analytics the end of the annual audit?

5d Martin Herron, MHA MacIntyre Hudson
Cybersecurity webinar: how protected are you and your data?

Security Cybersecurity webinar: how protected are you and your data?

1w Emma Smith, Managing Editor
Back to the Future: why financial transformation just hasn’t happened

Technology Back to the Future: why financial transformation just hasn’t happened

1w Workday | Sponsored
GDPR: Don’t forget the human touch

Security GDPR: Don’t forget the human touch

2w Neil Patrick, Director of GRC and Centre of Excellence EMEA for SAP
5 key tech innovations helping accountants transform their businesses

Accounting Software 5 key tech innovations helping accountants transform their businesses

3w Heather Darnell, Founder of Ask the BOSS
HMRC scaling back digital projects to ‘release project capability to EU Exit work’

Brexit HMRC scaling back digital projects to ‘release project capability to EU Exit work’

4w Alia Shoaib, Reporter
What is the role of governance, compliance, and control in financial transformation?

Corporate Governance What is the role of governance, compliance, and control in financial transformation?

4w Workday | Sponsored
Grant Thornton joins with Immersive Labs to increase cyber talent

Career Grant Thornton joins with Immersive Labs to increase cyber talent

1m Lucy Skoulding, Reporter