High performing information technology (IT) departments at large companies have hit the ground running following the recent economic downturn, recalibrating their efforts to drive more business value from IT, and leaving their less adroit counterparts playing catch-up, according to new research from Accenture.
While many companies slipped into stagnation mode during the downturn, cutting budgets and focusing primarily on maintenance, high-performing organizations viewed IT as a growth engine for their business and the economic conditions as an opportunity to build capability.
Accenture defines high performers in IT as those that achieve excellence in IT execution, IT agility and IT innovation together, balancing the constant and sometimes opposing demands placed on today’s IT function.
High performers in IT not only manage IT like a business, but run IT for the business and with the business. CIOs at these organizations are engaged in their company’s business strategies and are able to truly map out how IT supports those strategies.
"Our survey found that chief information officers (CIOs) of high performance IT organizations are deeply involved in business outcomes and closely attuned to business needs – current and future – across the enterprise," said Gary Curtis, Accenture’s chief technology strategist who supervised the research. "They are successfully retiring their legacy systems and embracing newer technologies. They are adept at managing the balance between optimizing costs and ensuring that they have the budget, skills, and resources to help fuel business growth."
The research also found that high performers don’t just do a few things well; they excel across the board when compared to lower performing IT departments. Some examples:
• They have web-enabled 42 percent more of their customer interactions and 93 percent more of their suppliers’ interactions;
• They are 44 percent more likely to recognize the strategic role IT plays in increasing customer satisfaction;
• They are eight times more likely to measure the benefits realized from IT initiatives;
• They spend 29 percent more annually on developing and implementing new applications rather than on maintaining existing ones; and
• They are twice as likely to view workforce performance as a priority by addressing challenges such as an aging workforce and collaboration, as well as developing technical and soft skills (business knowledge, relationship management)
"High performing IT departments are powerful drivers of value for their organizations – not simply keeping the lights on, but promoting technology initiatives that power innovation and enable the IT organization to function as a business," said Curtis.
Working with CIOs, Accenture based its research on detailed assessments of more than 226 of the world’s largest private- and public-sector organizations. Accenture conducts the research periodically as part of its ongoing effort to identify the characteristics of high performing IT organizations.
The Gap Has Grown
The current research uncovered a gap between high performers and other IT organizations – a gap that has grown significantly since Accenture’s last look at high performance IT organizations in 2008. Indeed, the difference between high performers and their peers in regards to IT innovation has grown from 31 percent in 2008 to 42 percent today. In the area of execution excellence, the gap has increased seven points – from 30 percent to 37 percent – in two years.
"High performers that have shown the ability to differentiate their core IT capabilities during the downturn – a period when many organizations were focused primarily on cost reduction – are now positioned to deliver much more value to their companies as they pursue business growth,” said Curtis. “Companies failing to adopt the same management practices as high performers are, at best, at a competitive disadvantage. At worst, they are at risk of falling permanently behind."
About the Study
The High Performance IT research program has been operating since 2005. This report is based on detailed assessments conducted by the most senior IT executives in 226 of the world’s largest private and public sector organizations in North America, Latin America, Europe, and Asia Pacific These companies have combined annual revenues of $2.1 trillion, represent a wide range of industries and include both Accenture clients and non-clients.
To read the full report, please click here.