| By Business Wire |
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| June 19, 2009 07:31 AM EDT |
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As IT spending increases and virtually every business interaction
becomes increasingly digitized, new levels of IT savvy will be required
for all managers – both IT and non-IT -- to transform firms’ technology
into a strategic asset that boosts margins, according to MIT Sloan
researchers.
IT Savvy: What Top Executives Must Know to Go from Pain to Gain
by MIT Sloan School of Management researchers Peter Weill and Jeanne W.
Ross is based on field research in 1,800 organizations in more than 60
countries. The authors describe the practices, competencies, and
leadership skills that non-IT managers need to succeed in the digital
economy.
“In the current economic environment, companies can’t afford not to
become IT savvy,” says Weill. “Firms with above average IT spending and
IT savvy have 20% higher margins, those with an above average percentage
of shared applications and IT savvy have 30% higher ROAs, and firms with
above average IT infrastructure spending and IT savvy have revenue
growth three percentage points higher than their industry average.”
The authors boil down what it takes to become IT savvy into three steps.
The first is to fix what is broken by actively managing the IT portfolio
and assigning clear decision rights and accountability. “This means
choosing how they spend IT dollars and holding people accountable for
those decisions,” says Weill. “Often, spending is a decentralized
process so local projects may meet local needs, but don’t scale or
connect together and create a maintenance nightmare. The person who
suffers is the customer who has to jump across silos for service
throughout the organization. We’ve all experienced this when we have to
submit our change of address six times to the same company.”
The second step is creating a digitized platform for business execution
and innovation. The authors explain, “Start by identifying what’s not
changing. The core business processes in your firm that are not changing
define a reliable set of reusable IT-supported data and business
processes. The digitized platform standardizes and automates these
processes, thereby increasing reliability, decreasing operational cost,
and ensuring quality.”
Exploiting the platform for profitable growth, the third step, is the
hard –yet fun – part, they write. “To cash in on your platform, you will
be changing individual roles, organizational structures, and
organizational culture. This is a fundamental business change and, thus,
a major leadership challenge.” However, once those changes are made, the
addition of a new feature or geographic region is much faster because
companies don’t have to spend time integrating a new product or service
with the silos that exist, said Weill. “Instead, it bolts on like a Lego
block, and with this approach, you get faster time to market on products
and services which leads to higher revenue growth.”
“Companies often get the IT they deserve,” says Weill. “If they aren’t
clear about strategy and hold people accountable, then IT struggles to
keep up and is a source of frustration. This book provides describes the
simple and practical steps companies can take to get more value from IT,
which are essential as we move into a digital economy.”
About the Authors
MIT Sloan School of Management’s Senior Research Scientist Peter Weill
is chairman of MIT’s Center for Information Systems (CISR) and was
recognized by Ziff-Davis as # 24 of the “Top 100 Most Influential People
in IT” in 2008. Jeanne W. Ross is director of MIT CISR, Sloan principal
research scientist, and founding senior editor and former
editor-in-chief of MISQ Executive, a journal for managers translating
research findings into action.
IT Savvy: What Top Executives Must Know to Go from Pain to Gain
Peter Weill, Jeanne W. Ross
June 2009: Harvard Business Press
Link to book: http://harvardbusinessonline.hbsp.harvard.edu/b02/en/common/item_detail.jhtml;jsessionid=JIAB44G5XYFSGAKRGWDR5VQBKE0YIISW?id=10036&_requestid=20135
