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How soon does it ship: Available for download now
Type of bind: Digital
Format: Download: PDF
Label: Harvard Business Review
Manufacturer: Harvard Business Review
Page Count: 11
Printing Date: November 01, 2002
Publishing house: Harvard Business Review
Release Date: October 25, 2008
Sale Popularity Level: 1045972
Studio: Harvard Business Review
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Product Description:
This is an enhanced edition of HBR article R0211F, originally published in November 2002. HBR OnPoint articles include the full-text HBR article, plus a synopsis and annotated bibliography. Senior managers often feel frustration--even exasperation--toward information technology and their IT departments. The managers complain that they don't see much business value from the high-priced systems they install, but they don't understand the technology well enough to manage it in detail. So they often leave IT people to make, by default, choices that affect the company's business strategy. The frequent result? Too many projects, a demoralized IT unit, and disappointing returns on IT investments. What distinguishes companies that generate substantial value from their IT investments from those that don't? The leadership of senior managers in making six key IT decisions. The very first three relate to strategy: How much should we spend on IT? Which business processes should receive our IT dollars? Which IT capabilities need to be companywide? The second three relate to execution: How good do our IT services really need to be? Which security and privacy risks will we accept? Whom do we blame if an IT initiative fails?
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Rated by buyers -
The core of this ten-page enhanced article from the Harvard Business Review is that companies which successfully manage their IT "generate as much as 40% higher returns" than do others. The authors claim that these successful companies are the ones whose business executives articulate a clear strategy for IT in six specific areas.
This advice contrasts with the common wisdom that it is up to IT to "align their processes" with the business of the company. Without clear direction, IT directors push their staff to implement every technology that is considered standard for their industry. The result is a mishmash of expensive, generic systems that add little value to the company and an "overwhelmed and demoralized" IT department.
The authors address the question of outsourcing in a side-bar. Since they have identified CEO's who abdicate their leadership role as the prime cause of ineffective IT, it's not surprising that companies who simply outsource the whole IT function are often "dissatisfied" with the results. Ross and Weill offer the surprising advice that it would be better to retain IT in-house and let IT executives decide which functions "don't matter" and can be cost-effectively subcontracted.
The summary section in this enhanced article refers to "IT executives" who make "key decisions"; "IT people" who "shouldn't make decisions"; and an "IT department" to "blame" when an IT initiative fails. That confusion of terms may inadvertently say a great deal about the mismatch between external expectations of IT departments and their internal structure.
The article provides the careful reader a great deal to think about. It offers a useful counterweight and complement to Nicholas Carr's HBR article, "IT Doesn't Matter".
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