Is Your IT Organization World-Class?

According to new research from The Hackett Group, two critical ingredients are woven into world-class IT shops. The firm also offers four best practices to achieve world-class status.

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Tue, November 05, 2013

CIO — What makes an IT organization "world-class?"

New research from The Hackett Group describes what top-tier IT teams have in common. According to "The World-Class IT Advantage Part 1: The Benefits of Pursuing IT Operational Excellence," a focus on IT automation and reducing complexity can help achieve higher levels of effectiveness and meet ROI expectations nearly twice as often, while at the same time representing a 15 percent cost-savings.

IT Organization

The Hackett Group analyzed benchmark studies performed at more than 100 Global 1000 companies over the past few years and defines world-class IT organizations as those that achieve top-quartile performance across more than 60 weighted efficiency and effectiveness metrics, says Erik Dorr, senior research director, the Hackett Group.

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According to John Reeves, global IT advisory practice leader for The Hackett Group, automation is a key differentiator for world-class IT organizations. Regardless of whether that IT automation is happening in a company's supply chain, demand chain, purchase order management, or in the data center, if IT is delivering on business units' requests for automation and self-service, they are reaping efficiency and cost-savings benefits, he says.

Automate Yourself Into Job Security

"IT organizations often struggle with relevance and how to deliver value," says Reeves. "Conventional thinking is that IT shouldn't focus on automation, because they'll automate themselves out of a job; the exact opposite is true. Automating tasks across the enterprise and letting non-IT employees use self-service capabilities frees up IT to become a high-value service provider, dealing with vendor management, data integration, and business-IT alignment and strategy, which are harder for IT, but provide more direct value back into the business," he says.

Automation also allows world-class organizations to spend about 15 percent less than comparable organizations on IT functions while doubling the effectiveness of their initiatives, Reeves says.

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Reduced complexity is another key element world-class IT organizations use to eliminate nonessential spending, maximize staff productivity and drive down costs, Reeves says. The Hackett Group measures complexity in a couple different ways, one of which being asset and type counts, Reeves says.

"When we look at the companies we benchmark, we look at 'type counts,'" Reeves says. "Types of languages, types of data centers, types of software. We then can measure how many systems you have to support vs. how much you have to deliver. The more complex an organization, the harder it is to change and respond to changing business needs, and that makes businesses slower, less efficient, and more costly," Reeves says.

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