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November 06, 2013
Digital success requires transforming IT’s emphasis
By: Mark McDonald

Every organization gets the IT they fund, despite IT strategy, priorities or presentations. CIOs have had to live through a decade of devaluation in traditional IT. Focusing on cost, consolidation, service levels and security have created an “austerity trap” for CIOs creating an IT organization enabling back office operations rather than driving front office revenue growth.

Cost, service and security remain relevant in the digital world. But they do not define the requirements for high performance in a digital world. The report “High performers in IT: defined by digital” explores the relationships between high performing IT and digital technology. The report studied more than 200 companies identified the different emphasis digital places on traditional IT. Adopting a strong external or outside in focus was one of those differences.

Digital requires emphasizing the outside more than automating the inside

The growth vs. cost distinction is one of the defining outcomes of high IT performance as high performers in the study. High performers reported being significantly better at meeting the technical and business needs of growth related solutions such as sales and marketing, supply chain and customer service. The table below illustrates the difference between the two.

The difference between high performers and the other organization is the result of consistent focus and expectations associated with a ‘both and’ strategy rather than a cost only focus.

Delivering more business performance for less resources

More for less is the motto of the austerity trap holding IT organizations back in their digital journey. For too many CIOs the only word that matters is “less” with little ability to think about delivering more than traditional IT at a new cost basis. Digital technologies cause IT to leave the innovation desert and enter a bazaar world of new technologies, software, solutions and business models.

Traditionally a change in technology required the redevelopment and reinvestment in the entire IT stack. This is not necessarily the case in digital business where solutions ride ‘over the top’ of legacy, information replaces application as the primary source of value and companies have to work with customer expectations.

High performing IT organizations actually spent less on customer services related applications than they do on other applications indicating a focus on quality of results rather than quantity of spend. It is NOT a matter of budget; rather it is a matter of emphasis and recognition of digital realities and possibilities.

Placing the right accent on the right syllable

Digital business succeeds when it creates competitive edges based on unique combinations of digital and physical resources. Those combinations reflect four principles that we outlined in a prior post:

  • Digital should drive organic growth

  • Digital should deliver operational results

  • Digital demands information

  • Digital requires new technology platforms

These principles concentrate IT strategies and directions by defining what matters and what needs to be right in the digital future. The report describes how high performing IT organizations redefine themselves by being digital.

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