A decade ago, manufacturing companies had visions of paperless offices, automated plants, and virtual enterprises. But the euphoria quickly evaporated when these visions failed to materialize. Now, from in-depth interviews in a worldwide survey of seventy manufacturing firms, a research team from the prestigious consulting group McKinsey & Company concludes that, far from being a failure, information technology (IT) can be a vital strategic weapon in the manufacturing sector, just as it has proved to be in service industries. In Do IT Smart, experts Rolf-Dieter Kempis and Jürgen Ringbeck along with the McKinsey team identify four cultures of IT users -- stars, big spenders, cautious spenders, and laggards -- based on how efficiently and effectively the users manage IT. The stars stand out because their strong command of IT means they are better able to manage core processes such as R&D, sales and service, and order processing, which in turn produces tangible payoffs in profitability, growth, and market share. From their study of star performers, the authors formulate seven rules for developing a superior IT organization. First, they argue, managers must make IT a top management issue and, second, a priority in product development. IT must be viewed as a strategic tool so that IT strategy can be aligned with business strategy. Clear objectives must be set, and core business processes redesigned. Warning that IT is reaching saturation in administrative applications, the authors describe how it is far more profitable to integrate IT into marketing, sales, and customer service. Finally, they describe how all these elements must be brought together into a lean, customer-oriented IT network. McKinsey's breakthrough study shows that as organizations are increasingly overwhelmed with data, IT will become more of a dividing line between the winners and the losers. IT stars will make quantum leaps in effectiveness, while poor management of IT results in a cost explosion. Managers and information officers who want their business to keep and gain the competitive edge IT offers need this unprecedented insight into how to Do IT Smart.
Discussion Group Questions 1. What are the characteristics of excellent IT management? How does technical performance translate into business success? What are the value drivers top managers should look at? How powerful is the real overall impact of IT on business performance and core business process excellence? (Introduction, pp. 3-10, 189-193) 2. Why should managers give IT priority in product development? What distinguishes a superior product development process, and what are the differentiating IT systems that IT stars have in place/are planning to introduce shortly? (pp. 27-52) 3. What are the critical applications that are currently revolutionizing the marketing and sales process? What are the most important performance levers that IT stars focus on? (pp. 53-65) 4. What are the crucial conditions for successfully applying IT in manufacturing and logistics? To what extent does the type of business matter when using IT for planning on the shop floor level? (pp. 66-79) 5. What are the most important guidelines for organizing IT management? When does it pay to outsource IT services? How do IT stars excel with a sophisticated IT planning and control process? (pp. 103-129) 6. Every month new software and hardware releases/products claim to improve technical performance. What is the right approach for planning replacements of large standard SW packages? When does it pay to be an early adopter, and when should a company search for individual innovative IT solutions? (pp. 130-163) 7. Is there an ideal way to introduce large complex SW packages like SAP? Why is it usually a must to redesign the business first? (pp. 133-138) What are the success factors of superior IT megaproject management? (pp. 150-160) 8. What does the emergence of new IT technologies like the Internet mean for future IT management? What are the critical future IT application areas a company should be looking at now? How can a company migrate its IT management to world-class operations? (pp. 167-186)
Ram Ramakrishnan Vice President, Strategy and Development, Schneider Electric This is a compelling treatise that demystifies IT management by tying IT to business success...must read for every business and IT leader who wants to "Do IT Smart."
Dr. -Ing. Andreas Groth Vice President, Information Management/Organization, DaimlerChrysler Aerospace, MTU Munich The first successful approach ever to demonstrate and benchmark the efficiency/effectiveness ration of IT. The benchmark greatly helped us to achieve a much better understanding of and argumentation for value-driven IT support of our business strategy and processes.
Hans Hogstedt Director in Corporate IT, Tetrapak The biggest value of this benchmarking is its focus on the business value of IT investments and IT'S contribution to corporate success. This area used to be a matter of pure speculation: these findings make it measurable, based on hard facts and figures.
Denni Interliggi CIO, GenCorp Inc. This book provides companies with best-practice benchmarks against which to rapidly identify the strengths and weaknesses of their IT management as it relates to business issues.