McKinsey on IT

Divide and conquer: Rethinking IT strategy
Companies manage established businesses differently than they manage new ventures. But too often, information technology is managed with a broad stroke aimed at cutting costs. While most of the IT in many companies should be managed for productivity and cost-savings, technology that supports businesses should be invested in and measured by the same decision-making process used for other investments in those businesses. Additionally, companies must find ways to manage IT investments aimed not only to help current businesses achieve competitive advantage, but also to develop new businesses that can change the rules within an industry. By differentiating among these different types of IT supporting different parts of the business, companies can make sure they’re investing in future success while continually paring the costs of technologies that have become routine. Download

Managing IT for scale, speed, and innovation
Centralizing IT with other functions in a shared-services unit reduces costs and can improve productivity, but it can also put distance between the business units and the technology capabilities they need to succeed. To avoid losing out on speed and innovation, companies need to govern IT as they govern their business – with different rules and metrics for different parts of their organization. Basic IT services should be tightly integrated with other back-office operations and managed for scale efficiency. IT services that help businesses develop new products for competitive advantage should be integrated with those businesses. Most companies should also invest some of their IT resources in more speculative research that can deliver new products and other innovations that can open new markets. Download

Interview with BP’s CIO John Leggate
An interview with BP’s CIO John Leggate tells how one large industrial player has developed a process to evaluate and experiment with cutting-edge technologies that can scale to add value to their business. Download

Splitting demand from supply in IT
Companies can get more productivity out of their IT organization by setting up demand organizations that coordinate development requests between the business and the IT supplier. These demand organizations also coordinate requests across business units, avoiding unnecessary duplication and achieving greater economies of scale. Demand organizations should not only manage the suppliers and development projects, but ideally should have control over business processes that are increasingly dependent on IT capabilities. Download

Connecting CRM systems for better customer service
Many companies miss out on opportunities to make new sales or resolve customer service issues because they are not adept at passing leads and case histories across the boundaries of departments and business. Customer relationship management programs help keep track of customer preferences and histories, but they are often isolated in one part of a company. By strategically linking customer relationship systems, companies can make a routine of passing valuable sales or service data to the right person -- for example, helping a teller pass a loan sales lead to the appropriate lending agent.Much of the technology is already in place, so that the main barrier to building these connections is often just the recognition that there is value in doing so. Download