IT Leaders look beyond cost cutting !

IT Business Edge probes. Tim Lambert, vice-president of marketing, UnisysUnisys Global Outsourcing and Infrastructure Services answers! There are quite a handful for service providers to take and note.




Question: Unisys recently commissioned research from IDG that explores the correlation among IT practices, IT management priorities and business outcomes. IDG categorized about a quarter of the organizations it surveyed as IT leaders, those that were most effective at managing IT resources to support business strategy and goals. I believe the leaders ranked the importance of business outcomes somewhat differently than other organizations. What were some of the most striking differences?

Lambert: The largest gap between leaders and others in the survey was on the importance of stimulating innovation and creativity. Eighty-one percent of leaders ranked stimulating innovation and creativity as a very important business outcome, compared to only 52 percent of others in the survey. The new research shows that leading organizations focus their priorities beyond cost-cutting, which is conventionally viewed as the primary business driver of IT best practices. They create service delivery models that employ a balanced mix of practices involving people, process and automation to execute, adjust and innovate in achieving multiple business objectives. Leaders are also more likely to look outside their organization and draw from outsourcing partners to improve best practices. They build partnerships to draw on the expertise of their sourcing partners rather than viewing outsourcers as simply vendors of a service.



Question: There was more agreement on the top IT management objectives. What were the top objectives? Why do you think there was a more consistent viewpoint across all organizations in this area?

Lambert: While cost savings, customer satisfaction and increased business agility remain key measures by which organizations determine business success, leaders have a heightened sense of importance regarding all IT priorities compared to the others. The consistency among the leaders’ perspectives suggests that IT organizations must certainly deliver what you would consider table stakes — such as reducing the risk of operational failure and controlling costs — but also identify IT management priorities that impact their own specific business priorities. What separates the leaders is the ability to pursue multiple business objectives concurrently with equal effectiveness.



Question: One interesting area of the research was that the popularity of certain IT-enabled practices did not correlate with positive business outcomes. How do you explain this? Does it suggest that companies are too quick to adopt IT-enabled practices just because they are trendy?

Lambert: Companies certainly must place a priority on adopting IT-enabled practices, but merely adopting the practice does not ensure that it is a best practice. For it to qualify as a best practice and have a lasting positive impact on the organization, it must be not only widely adopted, but also relevant to an organization’s business and IT management goals. CIOs must work closely with the business to determine which outcomes are the most important and then craft an IT management strategy by outlining the priorities and implementing specific practices accordingly. This will sometimes mean deferring the adoption of some new service delivery approaches if adoption cannot be clearly linked to a critical business outcome.The 139 respondents who emerged as leaders in IT best practices consistently placed a significantly higher premium on customer-focused outcomes than the entire survey population. While all companies ranked cost reduction as an important outcome, the leaders chose value-based outcomes such as customer satisfaction/upsell, customer loyalty/retention and increased business agility as more important.The leaders embraced three key best practices that they considered most effective — including knowledge management, modeling methodologies and Software as a Service ((SaaS). The critical element here is that viewed together, those practices help achieve a balance of people, process and technology. This three-pronged approach to deliver IT services is essential to achieve collaborative innovation between IT and the organization.



Question: Which IT-enabled practices showed the strongest connection to positive business outcomes?

Lambert: Two practices in particular stand out as having a significant impact on business: SaaS and capability maturity model integration (CMMI). While only 12 percent of respondents worldwide have adopted SaaS, those who have adopted it rate it as very effective, and as having a significant impact on achieving business strategy and goals. Only 13 percent of respondents have adopted CMMI-processes for consistent and effective application development, but the practice is rated high for its impact on business. This suggests to us that SaaS and CMMI are emerging areas to consider when seeking to evaluate the cause and effect of IT practices on business outcomes.