IRISH COMPANIES are failing to capitalise on the potential of IT to bring innovation and improvements to their business and increase revenue, a new survey has shown.

According to PricewaterhouseCoopers' IT Technology Value survey, IT is still being viewed as a means of cost reduction, rather than a way to boost revenue.

Sixty-eight per cent of chief financial officers (CFOs) who took part in the survey said they had experienced no increase in the revenues of their organisation in 2007 that could have been attributed to IT.

"This is a lost opportunity for many of these organisations, and may reflect where they are on the IT maturity curve - in reactive rather than proactive mode," the report said.

PwC's Ciarán Kelly said there is less emphasis on the cost of IT investments and more on the value it will deliver to the business.

"That has impacted the ability of IT to deliver real value to the business. IT managers and chief information officers are able to justify the budget for keeping the show on the road, but they struggle sometimes to justify the budget for making investments that will really improve the way the company runs or reduce costs," he says.

Despite this, the survey revealed that more than half of CFOs surveyed - 57 per cent - said IT was a significant factor in reducing costs, allowing companies to increase business without adding to staff numbers, reducing the need for administration and support staff, and making communication more effective.

IT projects may lose out on some credit for improving the business. Mr Kelly says that, while many IT projects are linked to a business case before the project is undertaken, many companies fail to check if goals were achieved.

"It's just not measured. In many cases, IT might be helping the business, but they're not actually doing themselves any justice because they don't actively measure if it has," he says.

"There is a saying - if it's not measured, it's not done. In this case, it's not measured, it might be done, but no one is asking the question."

The survey also found that managing information was one area where IT systems may need an overhaul, with 17 per cent of respondents citing the failure of IT systems to provide important management information as one of their top concerns, and 35 per cent planning to replace or implement a new system.

Twenty-one per cent of CFOs said the IT function "was not responsive to business needs".