Over the past several blogs, I have outlined tools that you can use to transform your IT department into a valued strategic partner that will benefit your entire enterprise. But one question lingers: after you have done all this work, what will the payoff look like? How will you know if you have succeeded? I’m Bob Kress and in this final blog I will provide the dollars and cents rationale to support running your technology operation like a business.
When we look back at the results of Accenture’s ten year IT transformation program, four metrics help us measure success. Our percentage of satisfied sponsors rose to 92% from 67%; annual IT spending declined by 22%, while our workforce increased by over 300%; annual IT spending as a percentage of company revenues declined by 59%; and Accenture’s annual IT spend per person fell by 70%. The backdrop to all of this was Accenture’s explosive growth to nearly a quarter of a million employees from 75,000 in 2001, while revenues more than doubled to US$25.5 billion during this same time.
If that’s not enough to persuade you of the value embedded in IT transformation, consider this: over ten years, Accenture invested about US$1billion in hundreds of transformational projects, and savings now add up to US$3.5 billion for more than a 300% return on Accenture’s investment in IT.
Achieving this success has required hard work and calculated action. We followed a deliberate strategy based on the attributes that enable high performing IT organizations to perform fundamentally differently and continuously better than their peers. Our ongoing high-performance IT research program identified three buildings blocks that make the difference:
Execution, which depends on a governance structure to measure the costs and benefits of IT investments. I spoke about this in my first blog.
Agility, which aligns IT resources to business requirements and priorities.
Innovation, which is grounded in a collaborative mindset.
These building blocks cut across nine core capabilities that high performing IT organizations leverage to focus on meeting core business objectives, such as customer satisfaction and employee productivity, while other IT departments often set cost management as the top priority. In my book, Running IT like a Business: A Step-by-Step Guide to Accenture’s Internal IT, you can read in detail how these capabilities, which include strategic IT alignment, solutions delivery and outsourcing, contribute to creating a differentiated high performance IT organization.
Ultimately, IT transformation begins with the CIO, who can influence the organization to improve IT’s agility, innovation and execution while fostering a stronger partnership with the business. If the CIO accepts this challenge and drives this transformation, then you will see that the faster you leverage the latest innovations in IT, the more your organization will benefit and the sooner you will deliver the full advantages of high-performance IT to your entire enterprise.
I hope my blogs have been thought-provoking. Write me back and tell me how you plan to transform your IT department and run it like a business.