Where IT Fails: Let’s Just Say There’s Room to Improve IT’s Moves

I.T. DECISION-MAKERS at small and mid-market companies think the IT shop is best at supporting tactical efforts such as improving efficiency, but they reported that IT falls short when it comes to innovation and other strategic contributions, according to a survey by Forrester Research.

But there’s room for improvement even in areas that executives think IT is good at. For example, only 38 percent of the 540 executives surveyed think that IT is great at improving workforce productivity. More respondents—46 percent—said this is something IT is only somewhat good at. Similarly, only 34 percent said their IT departments were great at lowering company operating costs.

Even fewer execs think IT is great at making strategic contributions. A mere 21 percent said that IT excels at revamping core business processes.

The decision-makers surveyed included both IT executives and business leaders such as CEOs and CFOs. Michael Speyer, the Forrester senior analyst who led the study, notes that the IT execs gave themselves better marks at cost-cutting and improving productivity than non-IT execs gave IT. Speyer says the ratings are based on respondents’ perceptions of IT, and he thinks the differences of opinion suggest the need for a common language shared by IT and the rest of the business when evaluating IT’s performance.

As for why IT isn’t better at contributing to strategic efforts, Speyer points out that IT has had 20 years of practice supporting such areas as improving efficiency, but only in some companies has IT been asked to contribute to core business transformation. For example, in retail, enabling employees to go online to find the location of an out-of-stock item or allowing customers to order on the Web and pick up the item in a store are business innovations that aren’t possible without IT. But in general, Speyer says, IT execs have not been called upon to help brainstorm new business models, and so supporting innovation can be outside the comfort zone of many IT shops.

Best Practices:

1] Create shared metrics. Speyer says objective measurements that both IT execs and non-IT execs can use to discuss how well IT is doing can help close gaps in how IT’s performance is perceived.

2] Make more time. Create opportunities to work on strategic initiatives by streamlining IT operations. For example, consolidating servers using automated data center management tools makes data center management easier and frees up IT staff for other activities—like learning about the business.

3] Speak the CEO’s language. IT must figure out how to translate business goals into IT goals. To do so, the CIO must learn the language of the business and understand its processes. Compared with their counterparts in large companies, CIOs at smaller companies may find it easier to get close to the action.