Tools & Technologies

What Makes a Company Good at IT? Three Keys

Recent research from the MIT Center for Digital Business and McKinsey & Co. found three keys for companies that were “good at IT” – meaning that quantatitve metrics for productivity and profits were aligned with higher scores in various 5-point ranking scales on IT practices. The research surveyed 330 public companies in the United States.

The three keys are:

  1. Becoming data-driven for decisions – using IT for assembling data and using it to make decisions, versus relying on intuition and expertise.
  2. Developing consistent technology processes – using IT to create common ways of performing common processes across business units and geographies; such as fulfillment, procurement, and human resources.
  3. Embracing good technology governance – which means having clear ways of prioritizing IT projects, involving business leaders in IT, and tracking how projects are progressing and succeeding.

The authors concluded their brief article on the research with these three paragraphs:

The bad news here is that best technology practices are still not widely adopted even after all these years and money spent. The good news is that there is still substantial opportunity for most companies to improve how they manage and use technology, and substantial business benefit once they do.

Clearly, not all companies are going to be willing or able to do these things. One of the most consistent and striking conclusions from business research is that best practices are far from universal, even when they’re widely acknowledged as “best.” What’s more, since technology practices are so unevenly adopted, and so closely linked to better performance, performance itself has been diverging.

Digitization, in short, is not a great equalizer that drives all companies toward similar processes and outcomes. Instead, it’s driving the leaders and laggards further apart.

My Comments
1. There you have it – the three keys: data-based decision making, consistent processes, and technology governance.

2. The three work together. If having good data for making decisions is essential (key 1), then having common systems to power common processes (key 2) produces comparable data points. To make sure this happens, governance keeps people and units pulling in the same direction (key 3).

3. There’s bound to be a longer report on this research before long.

Categories: Tools & Technologies