Managing Information, People And IT to Improve Business Performance

Only 37% of companies, however, think that the way they use their information, and their information systems, represents a competitive advantage. These are companies where the IT function has reached a certain degree of maturity that enables it to look beyond the support function role and position itself as a partner to the firm’s business units. These companies have broken through the first barrier in the utilization of the company’s information capital and acknowledged the need for a style of management that encourages behaviors centered on collecting, sharing and updating information. Performance is measured using indicators that gauge the efficiency of their business processes, and additionally, they have improved their ability to identify and promote managers and employees who have IT as well as operational skills.

The study also demonstrated the existence of an evolutionary pathway by which the IT function progresses from one stage of maturity to the next. Most of the other companies surveyed were shown to have IT functions at intermediate stages of evolution.

While 82% of private sector firms have been affected by an IT cost-cutting plan and budgets have been subject to downward reviews, expectations continue to rise. However, contrary to trends during the economic crisis of 2001-2002, CIOs are seizing the opportunity to underline the contribution that their function makes and to develop its maturity within the company. The most mature IT functions have managed to maintain investments in strategic priorities, through faster execution of decisions taken and a real ability to accelerate high-impact projects or initiate new projects to capture opportunities that present themselves.

CIOs as ambassadors of reform
The near-omnipresence of Internet technologies and mobile communication solutions enables companies today to invent new business models, launch innovative product and service offerings, and adopt cooperative, distributed ways of working that engage all of the actors in their value chains.
More than ever, it is essential for companies to look beyond the traditional IT management framework to take account of all the factors involved in the effective use of information. Making progress solely on the IT front will not produce the desired effects on corporate performance and will only aggravate the under-utilization of IT potential. CIOs need become the ambassadors of a reform within which current forms of IT governance must evolve to explicitly encompass information usage.

In the present economic context, CIOs who have developed their function’s maturity stand out as the ones who are able to capture the opportunities that abound. At a time when many companies are extending and reinforcing their business model, they must also energize their information capital by leveraging their IT function: information matters! Putting information to effective use is clearly the next big challenge for business.

Donald A. Marchand is Professor of Strategy Execution and Information Management at IMD. He teaches on IMD's Orchestrating Winning Performance (OWP), Mastering Technology Enterprise (MTE) and Managing the Global Supply Chain (MGSC) programs as well as in IMD’s Partnership Programs. Professor Marchand is also the Chairman of Enterprise IQ based in Lausanne.