What do the highest-performing IT departments do differently than others? A new report from Accenture has some answers.
Top Three Objectives
The report, “High Performers in IT: Defined by Digital,” is the fourth in a series the research firm began in 2005. But this is the first to show high performing IT departments “now have the tools and know-how —digital tools and digital know-how — to race far head of the rest.” As with everyone else in digital businesses, organizations with a high performing IT operation focus above all on the customer Businesses performing less highly give priority to cost, productivity and processes.
The top three business objectives for top performers: providing the right information to the right person at the right time, finding better ways to interact with customers and delivering new services or products to customers.
Such companies, the report states, understand that technology “is now at the point at which buyers can again be treated as individuals” after a period when technology “created frustration and corroded relationships with customers.”
By contrast, the top three objectives for other organizations are cutting operational costs, increasing workforce productivity and automating core business processes.
The report notes that the highest performers are addressing their organization’s needs from a business viewpoint, not only from the needs of IT, and they track the impact of investments on business metrics more frequently. Interestingly, the CIOs of such organizations have been in their positions longer than the average CIO, which implies they’ve benefitted from aligning their department with the business’ key goals.
Other data points in the report help define the picture of the most effective CIOs. For instance, they allocate seven percent more of their IT budget to new projects than others do and more than half of those new projects are intended to create strategic capabilities. One example: Verizon Wireless equipped its sales personnel in retail stores with tablets having point-of-sale software, which helped salespeople showcase technologies such as the tablets themselves — and to take orders at the same time.
From the Accenture report, "High Performers in IT: Defined by Digital"
High performers are also looking at new system architectures with a “cloud first” orientation, which often involves a hybrid cloud arrangement that combines public and private clouds. A third of high performers say this flexible architecture is leading to cost reductions, compared to 14 percent of non-high performers who can say the same thing. Case in point: high performer Deutsche Telekom leveraged Google’s cloud-based App Engine platform for its Tripdiscover.de travel portal and was able to deploy this scalable, real-time system in only 18 weeks.
While the focus of this report is on IT departments and CIOs, it echoes the steps an organization takes to become a digital business. High performing IT departments, for example, commit heavily to mobile transactions, mobile app stores for the enterprise, social collaboration, business analytics, virtualization and Internet of Everything real-time monitoring of business-critical products and processes -- just as digital businesses in general do.
High performers also provide more capabilities for their employees to self-service many of their basic IT and HR needs, such as resetting a password. For these IT departments, Bring-Your-Own-Device (BYOD) behaviors are not seen as threatening, but as “productivity multipliers,” since employees now have the tools to work on pressing problems anytime, anywhere. This employee-driven momentum encourages the IT department to set up Web tools for, say, crowd-sourcing new ideas that can help the company strategically.
Digital Business Transformation
The report has a couple of weak points. To determine high performers, Accenture asked CIOs to self-access their departments based on “150 proprietary indicators of high performance in managing IT,” for eight capabilities. It’s not clear how accurate that self-assessment was in determining which companies are actually high performing.
Additionally, the report appears to use the phrases "high performing CIO" and "high performing IT" interchangeably — even though a large number of younger IT workers in a department could venture into cloud, mobile, social media and other directions before an older CIO could prepare to lead the charge. Or consider another example: forward-looking marketing personnel try to get their digital aims accomplished by enlisting sympathetic IT personnel instead of through a directive from the top.
But, in general, this report is a welcomed addition to the body of research all pointing in the direction of how organizations can effectively transform themselves to succeed in this digital age. It’s not clear if a high performing IT department could exist in an organization with, say, change-resistant marketing, sales and customer service departments. But it’s clear IT departments have to sing from the same hymnal as the rest of the company and at least now IT departments have a songbook so they can find the melody.