How IT Metrics Can Drive IT Transformation

Numbers tell the tale: 93 percent of senior executives want to update their data technologies to increase agility, save money and spur innovation. Given that, why are more than seven in 10 companies stuck at the starting line?

That disconnect between strategy and execution reflects the need for a new scorecard for IT, one based on specific business metrics and backed up by a firm commitment from senior management, according to a yearlong series of in-depth studies of business and IT leaders conducted by the Business Performance Improvement (BPI) Network.

In a global survey of business executives, fewer than half rate the level of innovation in their IT groups as “good” or “very high,” and fewer still give those ratings when asked about IT’s progress toward a true IT transformation. In short, most business executives say they don’t view their IT workers as “strategic, responsive and valued business partners.”

“Innovation is an often misunderstood and misused term,” states Scott Offermann, director of critical operations at Cushman & Wakefield, a commercial real estate company, in the report. “True and incremental innovation is rarely recognized and even more rarely acknowledged.”

To remedy that, the executives suggest evaluating IT on a variety of metrics, including: reliability and security of infrastructure (46 percent); solutions that further business performance (38 percent); quality and timeliness of application delivery (36 percent); and speed of problem resolution (29 percent).

Identifying the Obstacles to IT Transformation

But that’s only half the story. BPI Network also asked front-line IT workers — a group that traditionally embraces innovation — what hinders their performance. While the majority agree that business goals are important, they also indicate a need for tools, training and financial resources to reach those goals. That second checklist shows that most companies are failing or near failing in their efforts at IT transformation.

The IT pros surveyed list their biggest obstacles as: insufficient IT staff, training and resources (46 percent); inadequate funding (43 percent); and shifting priorities and business demands (34 percent). As a result, 71 percent say they have not even begun or are just “getting started” in an IT transformation.

Only 15 percent of the IT professionals surveyed say their companies have clear and detailed roadmaps. The remainder say their plans don’t exist, need updating or provide only general direction. And just 18 percent say their companies have ongoing cross-functional teams that can match up the emerging needs of the business with new IT capabilities.

To be sure, some of the problems lie within IT itself. The workers list their three weakest skill areas as application development, software engineering and data management — the three most critical skills in revamping IT infrastructure.

Another big problem: Time required for maintaining legacy systems; four out of five workers say they spend at least half their time on such work, leaving little time for innovation.

“Change is not easy. It has to be led well, and you have to have strong leadership,” states Dr. Natalie Petouhoff, a principal analyst at Constellation Research, in the report. “Being a business process person, I see the opportunity — and the opportunity is huge.”

Cloud Computing Levels the Playing Field for Small Businesses

For decades, IT directors at SMBs struggled to compete while larger rivals poured tens of millions of dollars into sophisticated on-premises data centers. While SMBs often provided a superior product, a better price and personalized service, the slanted IT playing field favored corporations that could afford powerful capabilities in marketing, supply chain, sales and administration.

Today, the global shift to cloud-enabled systems offers significant advantages for SMBs that will help them innovate and compete with companies of any size, in any part of the world.

But as Bennett Blank, head of innovation at Intuit, states in the report, practice makes perfect. “Innovation is an organizational capability, which — just like any capability — can only be mastered through consistent practice over time.”