Feature

IT under the corporate microscope

The latest World IT Strategy Census reveals opportunities for IT directors to make a lasting contribution to the corporate purse

With year 2000 worries behind us, it looks like IT could finally be getting a serious look-in when it comes to being seen as a top card in the business pack.

Without doubt this step-change has been engendered by the e-word, which has set global economics and every business "given" on its head.

Certainly, the recent World IT Strategy Census 2000, carried out by the London Business School and IT benchmark specialist Compass, indicates that the tide is on the turn for corporate IT.

The census surveys the attitudes of some 400 chief executive officers (CEOs) in 11 countries. Two years ago their predominant attitude to IT was frustration at being unable to tie down any real measure of the value, if any, that IT contributed to the financial performance of their company.Neither did last year's survey bring much cheer to IT.

"Last year's census revealed that IT was falling short of boardroom expectations when it came to delivering competitive advantage," says this year's report.

Now, thanks to the e-word, that is definitely changing. The spotlight is on IT - and for the right reasons this time.

With 83% of CEOs rating e-commerce as "important" or "very important" - ranking it just about equal with business growth (86%) and increasing profitability (85%) - it's no coincidence that 77% of them also say that improving IT performance is "important" or "very important".

"The real bottom line," says the report, "is that the new economy is firmly influencing board agendas and occupying CEO mindshare. Abdication or delegation of IT-related issues is no longer an option for today's CEOs. They have to be fit for the information age."

But how and where is IT going to make the biggest impact in the minds of the CEOs and in the final figures of the annual accounts?

The census throws up three key areas where IT is expected to yield most competitive advantage.

The killer app for CEOs is customer relationship management (CRM), says the report - with 38% of respondents putting it top of the list of IT's contribution to competitive advantage.

Hard on CRM's heels come, first, two other specific areas of key business process: improving supply chain management (33%) and production and operational efficiency (29%).

Second, rapid exploitation of new technology (33%) to give across-the-board advantage in all business areas and processes.

CEOs are also looking to IT to make them better at sharing and using knowledge (25%), enabling better financial and management control (23%) and improving customer information systems (21%).

So, it's all good news and full steam ahead for corporate IT at last? Well, up to a point - though the census throws up one sour point. The CEOs might think IT is important, crucial and invaluable for executing business strategy in the new economy, but they don't think quite as much about those who run the IT department.

Only 51% of CEOs consider their head of IT to be the kind of person who should be advising and supporting them in devising business strategy, while a good three-quarters have a more mundane occupation in mind.

According to the census, what most CEOs want their IT directors to busy themselves with are:

  • Providing systems to support business strategy.

  • Keeping users and managers satisfied.

  • Running an economical IT operation.

  • Building a sound IT infrastructure.

  • Introducing relevant new technologies.

  • Educating the CEO on IT trends.

    These are, says the report, very much what CEOs wanted of their IT chiefs last year - the top-down perception of IT's value may have improved, but not so that of the IT chief.

    But there is, in the findings, an ambiguity which IT directors may be well-positioned to exploit, and that, ironically, is in e-commerce itself. More than half of CEOs expect the head of IT to "lead their organisation's e-commerce initiatives", says the report.

    The ambiguity is whether that means that CEOs trust their IT directors "to effectively address the business issues inherent in an e-commerce initiative" - namely, take a business leadership role - or does it mean, dangerously for the organisation as a whole, that "many CEOs may be paying too much attention to the 'e'; while forgetting about the 'commerce'. In other words, they are allowing technology to drive a strategic process that affects all areas of the business."

    IT directors need to regard their new job as e-commerce initiative leader as their best window into the boardroom.

    The CEO may be tempted to overfocus on the "e" and not the "commerce", but the smart IT director can have a shrewder understanding, and realise he has a chance not just to grab e-leadership, but business leadership.

    The good, the bad and the hopeful

    The good news: chief executives are turning to IT to make them winners in the new economy

    The bad news: chief executives are not turning to IT directors for their strategic advice in how to do so, only to keep the IT pumps manned

    The hopeful news: chief executives are looking to IT directors to lead their e-commerce initiatives, so it is up to IT directors to put the emphasis on commerce, not electronic, business not technology.


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    This was first published in August 2000

     

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