Use New Metrics For IT Success, INSEAD Says - InformationWeek

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Government // Enterprise Architecture
02:24 PM

Use New Metrics For IT Success, INSEAD Says

Executive support, IT talent, and a mature digital platform are key, says research from one of Europe's leading business schools.

Top 10 Tech Fails Of 2012
Top 10 Tech Fails Of 2012
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The gap between business and IT has been lamented since perhaps the start of commercial data processing in the 1950s. Remember all that talk about the need to "align" business and IT goals better -- or the endless warnings of how technologists won't get anywhere until they learn to speak the language of their peers?

Some thought the matter answered best in the 2003 The Harvard Business Review article IT Doesn't Matter by Nicholas G. Carr. His conclusion: You have to have tech to function as a modern organization, but tech doesn't make you more money just by having it.

AT&T would like to think it has finally found a rebuttal – and a way for that business-IT gap to finally get bridged. Working with researchers at Paris-based global business school Institut Européen d'Administration des Affaires (INSEAD) – the European Institute of Business Administration – AT&T has released a study that outlines how enterprises can better exploit IT investment.

[ How can the PC industry prosper? Read PC Makers, Learn From Car Makers: Use Model Years. ]

"Companies have been investing in technology and ICT [information and communications technology] for years -- and not got what they wanted out of that investment," said the firm's European business unit VP Andrew Edison.

The answer? The conclusion of the study is no shocker: investing in technology for technology's sake is never a good idea. Having the right "enablers" in place, however, changes everything. "For the first time we have identified statistical links between investments in new technologies and key business enablers to show what makes firms more competitive," said the authors.

The analysis was based on in-depth responses from over 220 IT leaders, plus a number of interviews with businesses and interviews with leading European politicians. Edison says the methodology was stringent -- engineered to eliminate self-serving answers from the firms -- and that a lot of data was discarded as invalid.

One of the key findings of the study was that if an enabling structure is in place, it will significantly boost the chances of a successful investment and cut the number of failed projects and fiscal waste. "…the probability of becoming competitive can double," said the authors. On the other hand, "When firms with weak key business enablers make significant investments in new technology, they do not increase the likelihood of better performance and essentially risk wasting their investments in new technology."

The necessary enablers, says Edison, are buy-in for any initiative from senior management; access to the best IT talent in the organization or in suppliers; and use of a "mature digitized platform" to act as a project base. Maturity is defined as the extent to which a firm's technology, business process and data components are standardized, shared and integrated.

What seems to be different about the AT&T-INSEAD analysis compared to others is that beyond the pieties about having support from the CEO is its emphasis on the digital platform. "Firms with immature digitized platforms can significantly enhance their competitiveness by ensuring that investments in new technology go hand in hand with the organizational changes necessary to achieve and sustain a mature digitized platform," says the report.

Sustaining a mature digitized platform is challenging, say the authors, as it requires continuously balancing the immediate demands of business units and project teams with longer-term enterprise-wide demands.

It's those organizations, however, that possess mature digitized platforms and can ensure investments in new applications are linked to such platforms that tend to make the best return on their IT plans, the study concludes.

Perhaps the question of the day for enterprises needs to be: Where are we with our digitized enterprise-wide platform?

InformationWeek is surveying IT executives on global IT strategies. Upon completion of our survey, you will be eligible to enter a drawing to receive an Apple 32-GB iPad mini. Take our 2013 Global CIO Survey now. Survey ends Feb. 8.

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