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March 18, 2010

Report: IT Organizations Should Play Active Role in Driving Business Change

By Hans Lewis, TMCnet Contributor

A new report from Boston Consulting Group, “IT Advantage: Spring 2010,' says IT organizations can, and should, do far more than simply act as order-takers. Instead, the IT function can play an active role in shaping the company's business direction and performance.

In a release, Wolfgang Thiel, global leader of BCG's Information Technology practice and one of the report's co-authors said 'The current economic climate demands that companies fire on all cylinders if they hope to not just survive but thrive. The IT organization is a potent weapon in most companies, yet it is typically underutilized. To remedy this, IT organizations need to be more assertive about their potential value added. And their business counterparts need to more actively seek to leverage what IT has to offer.'

The report gives CIOs and other IT and business executives much to think about on the topic. It features the results of a survey that BCG recently conducted with MIT (News - Alert)'s Center for Information Systems Research on the characteristics of IT units that drive business change. The survey found that the benefits of having the IT unit act as a change driver are indeed substantial. It also found that IT units that drive business change are quite distinct -- in structure, staff roles, HR practices, outsourcing, and governance -- from their less-proactive counterparts.

The report also covers a range of other topics related to the broader issue of how IT can improve business performance. Among the subjects that the report addresses are the following:

--Strategic IT workforce management: Human capital plays a critical role in IT. An IT organization's current people, roles, and skills may be fine for today's demands, but what about tomorrow? This article offers a blueprint for managing the IT people base with a forward-looking lens.

--Cloud computing: Cloud computing presents a new paradigm but, given its infancy, companies should proceed carefully. This article suggests a measured approach to exploring the benefits of cloud computing and managing adoption risk.

--Lean and banks: Lean practices have much to offer banks. But the key to realizing lean's potential lies in the implementation. This article discusses two pillars of successful adoption: a holistic, end-to-end approach and engagement of the people who actually perform the critical tasks.

--Scenario analysis as a tool for strategic IT planning: Strategic IT planning is always challenging -- but it is particularly challenging in times of uncertainty, such as the present. Scenario analysis can help by forcing a company to consider the full spectrum of possibilities -- not just what it believes will happen but what could happen -- and to think through probabilities and potential actions. This article explains the underlying philosophy and illustrates it with a session undertaken by a group of CIOs.

The report also features an interview with Derek McManus of Telefonica (News - Alert) O2 UK, who offers insight on what it takes to compete successfully in today's rapidly evolving mobile-telecommunications industry. McManus, the company's CTO, discusses a number of topics in the interview, including his transformation of the company's technology function and the role technology plays in reinventing the company's business model.

Read here about how, according to industry insiders, Cisco (News - Alert) is likely to introduce tools that will enable its network service providers to build their own high-speed networks.


Hans Lewis is a contributing editor for TMCnet. To read more of his articles, please visit his columnist page.

Edited by Patrick Barnard



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