Research suggests four imperatives for IT performance in the digital era

A new research by benchmarking and performance measurement firm, The Hackett Group, highlights four imperatives for achieving world-class IT performance in the digital era.  The research, Four Imperatives for Creating IT Agility in a Digital Age, says world-class IT organizations spend 21% less per end user than typical companies, and rely on 8% fewer staff.

The four imperatives that the research lists out are 

Reallocate resources from transactional focus to value-adding

To shift resources from “run” to “build” activities, IT organizations must relentlessly focus on efficiency improvements in the delivery of commodity services, the research finds out. “A key step is the adoption of a formal service delivery model, and the de facto standard for IT operations is the ITIL framework. IT organizations should consider consolidating infrastructure and service desk components to shared services or global business services,” recommends the firm.

Embrace digital transformation

“IT organizations are at a crossroads – with one foot in the new digital world of cloud, big data analytics, social media, mobile, and the Internet of Things, and another foot in the past, constrained by legacy technologies and skill sets,” explained The Hackett Group IT Transformation Practice Leader and Principal Mark Peacock. “Many IT leaders are overwhelmed by this challenge, and they are likely to find themselves marginalized. But those that are hoping to achieve world-class performance are energized by the opportunity to elevate the role of technology to a higher level, as senior management embraces digital as a cornerstone of the business strategy,” he adds.

The Hackett Group suggests IT should shorten solution development times, moving beyond traditional waterfall-based methods and adopting rapid application development approaches.

Lead the organization on the information and analytics transformation journey

“IT must take ownership of the enterprise information architecture, which has changed dramatically. In addition, IT must support ongoing business-led, data-related initiatives by providing services such as master data management, data integration and database administration. To facilitate all this requires new IT skills, which are expected to be scarce, and the most adaptable, fastest learning IT organizations with the ability to attract the best talent will have a competitive advantage,” the firm says. This is significant coming from a company that helps numerous global companies to benchmark. It reiterates IT’s role in the data journey.

Adopt customer-centric service design and delivery principles

And finally, that holy grail of IT services, customer service, is still relevant in digital age, says the research. “IT should focus on making it as easy as possible for internal associates, business partners, and external customers to interact with information systems. Self-service is a prime example of the potential for customer-centric design,” the research recommends.  To improve IT organizations can establish councils and focus groups to provide “voice of the customer” recommendations which can guide decisions regarding design of processes and supporting systems, the firm suggests.

How does an average company transform itself to what the firm calls World Class IT company? The research lists where to begin the journey. These are some of the specific steps that the firm lists.   

Assess efficiency gap. Measure baseline efficiency to gauge performance and uncover areas with the largest performance improvement opportunity. IT transformation must be self-funded in most organizations, so understanding the efficiency gap is an essential first step in freeing up resources to re-deploy to more value-added services.

Assess effectiveness gap. The effectiveness gap typically has an operational and strategic component. IT’s ability to meet business needs supporting a portfolio of business improvement initiatives and IT services is an indication of operational effectiveness. Strategically, IT effectiveness is reflected in its ability to support (or indeed lead) the longer term business transformation strategy, in particular as it pertains to “digital.” IT must gain an understanding of its effectiveness performance at both levels.

Assess capability gap and blueprint future state. Armed with an understanding of the different dimensions of the performance gap, IT must analyze root causes and assess which specific capabilities are deficient. The Hackett Service Delivery Model2 is a useful framework for this capability gap analysis, as well as design of the future state (blueprinting).

Develop IT transformation roadmap. A transformation roadmap balances objectives with resource availability and other constraints. Because of the fluid nature of technology and volatility of business conditions, IT transformation must be planned in short cycles and be adaptable to changes in conditions.

The research can be downloaded free from The Hackett Group’s website. 

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