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Digital Advantage Comes from Responsive IT

In a digital age, business survival depends on responsive IT. That is one of three key findings from a recent global survey of 750 business and technology leaders that I led for HBR Analytic Services ("The Leadership Edge in Digital Transformation"). Almost half of respondents (47%) said their organization had missed opportunities because IT was too slow to respond. While it's reasonable to expect some misses, companies with slow-to-respond IT departments were much more likely to say this at 64% than were respondents from companies with responsive IT (only 27% said they'd missed opportunities).

As the Red Queen said to Alice, it takes all the running you can do just to stay in the same place. Illustration by Sir John Tenniel

Companies with highly responsive IT (let's just call them the "Leaders" for brevity's sake) have gone faster and farther in making the transition to digital business than their competitors. This proved to be the case across many dimensions, starting with the ways in which they engage with customers: 68% of the Leaders said their customer engagement had been transformed by their use of new technologies compared with only 33% of Laggards. The delta was even greater when it came to business model transformation, with 62% of Leaders transformed compared with only 24% of Laggards. This translates directly to competitive advantage.

So what can IT leaders do to be more responsive? Some of the things that came out of our in-depth interviews with survey respondents as well as a series of CIO roundtables hosted by Oracle, the survey's sponsor:

  1. Simplify the IT infrastructure, with an eye toward more of a services approach
  2. Make better use of fewer partners who will commit not only to your success but to your customers' as well
  3. Exploit the cloud - the greatest benefit of which is business agility
  4. Focus your teams on innovation (doing more of the first three will free them up for this)
  5. Foster innovation across and beyond the enterprise, engaging employees on the front lines of the business as well as customers
  6. Make collaboration between IT and other parts of the business a top priority

These are not quick fixes. Companies that invested in simplification, efficiency and innovation during the economic downturn have definitely stolen a march on their competitors. Still, only 20% of survey respondents fall into the Leader category today. It's by no means too late to turn things around. It will, however, require a concerted effort involving technology, process change and people.

Next week I'll write about the second key finding -- the fact that digital business requires a high degree of collaboration across organizational silos. The week after that I'll cover the third: Who should lead digital innovation?

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