IT to move from cost-cutting agenda to revenue generation by 2009

That’s the view from a global study among senior execs mostly in the financial and professional services, manufacturing and technology sectors, just released by the Economist Intelligence Unit (EIU), with sponsorship from Capgemini, Cisco Systems and SAP. That’s fine, and several successful manufacturing companies would argue, quite rightly, that they’ve been thinking and acting that way for some time. But for the rest, this is a far-reaching prediction that has little to do with the IT itself, and everything to do with leadership, roles and people management and training – as well as overcoming existing denial. First, the EIU study identifies an ‘expectations gap’ – in that while 83% of CEOs and board members understand the requirement for IT to morph over to driving business, only 62% of their IT managers do. Incidentally, 70% of companies’ boards of directors believe the transition will happen by 2009. And to shed light on how important this is, the survey also shows that currently only half of senior execs believe they are performing well against business strategy – but of that half, fully 70% say IT was an important or key contributor. So there’s work to be done. Second, it suggests that there will need to be a determined move towards establishing joint business function and IT department project management and project responsibility to kick start the change. Indeed, about half predict the eventual demise of stand-alone IT departments in favour of functionally-aligned people with business and IT experience – although not within the next five years. “It is essential now that IT partners with, and not just serves, other departments and stands shoulder to shoulder with them,” says the report. At root, this is about re-gearing IT so your people are much closer to the real (and inevitably shifting) business action. And that means ensuring that business objectives are not only communicated to them, but that they’re part of the decision-making process as well as the delivery mechanism. That’s how the art of the possible gets conveyed to business leaders, who rarely understand IT and emerging opportunities. It’s how real innovation, leading to real competitive advantage, arises.