Six Principles of High-Performance IT

The 1990s have been a time of great advances in information technology So why are companies struggling with their systems? How a few are getting big payoffs from IT The 1990s have been a time of great advances in information technology. So why are companies struggling with their systems more than ever before? Many are burdened with costly and unduly complex legacy systems. Others have business and IT organizations that can't - or won't - talk constructively with one another. Still others are at a loss about where to invest to get the functionality they so desperately need. As Casey Stengel asked at a different time, in a different place: "Can't anybody here play this game?" The answer is yes - some companies really can play the IT game. The results of a recent study(*) reveal that there are indeed a number of companies that have gained control of IT and are using it to deliver real value to their business. The research shows that what distinguishes these companies is not technological wizardry, but the way they handle their IT activities. In fact, they manage IT in much the same way that they manage their other critical functions and processes: by getting real leadership at senior levels, by making IT speak business English, and by focusing IT work on delivering business value. Underlying the success of these companies are six basic principles shared by IT-smart organizations: * Make IT a business-driven line activity, not a technology-driven staff function * Make IT funding decisions like other business decisions - on the basis of value * Drive simplicity and flexibility throughout the technology environment * Demand near-term business results from development efforts * Drive constant year-to-year operational productivity improvements * Build a business-smart IT organization and an IT-smart business organization. [TABULAR DATA FOR EXHIBIT 1 OMITTED] Though they may seem to be just common sense, these principles demand fundamental changes in the way many companies approach and manage IT (Exhibit 1). Moreover, concerted efforts are needed to get them all working together; no single one of them works well without the other five. Taken as a whole, they indicate that achieving IT success is less about overcoming technical challenges than about mastering IT management. Make IT a business-driven line activity, not a technology-driven staff function Because of the divide that still separates business and technical managers in most companies today, IT is often poorly linked to business strategies and to the day-to-day work processes that support them. The better companies are bridging this divide and doing a better job of integrating IT into business strategy development. "The frequency and quality of our interactions with the businesses have dramatically increased. We fully understand the business strategy and corresponding IT initiative, and we're starting to have terrific dialogues on how we can support the business and the corresponding IT challenges." Consumer products company CIO The evidence suggests that companies that perform better hold business managers rather than technical managers accountable for IT This means business managers are responsible for selecting, implementing, and realizing the benefits of new applications. The IT organization works with the businesses to develop the applications and "owns" the technology infrastructure. But when things don't work, it's the business people that are held responsible. "I vividly remember the change it made in our company when our new COO told us the businesses were responsible for IT I really wasn't sure what that meant until we had a large IT-related customer problem in one of our businesses. The business head and I were called to meet with the COO to discuss it. I grabbed all the facts available because I was expecting to be the one on the spot. …