IT growth blockers

A world-wide A.T. Kearney study with top executives on "growth blockers" in organizations revealed last year that many organizations perceive IT as a real barrier for growth. A.T. Kearney initiated a second study to determine how top-managers assess the value corporate IT contributes to their organizations. For Central Europe, 65 top managers confirm that IT is a drag on companies' growth, with organizations estimating a loss of 6 percent in sales growth each year.

In one-on-one interviews, these business leaders pointed to lack of IT support for typical growth functions, such as business intelligence and customer relationship management (CRM). In particular, they cited IT shortcomings:

• Unclear IT value for business
• Slow IT response time for business requirements
• Inconsistent data

However, the problem goes beyond the IT function. In most cases, IT requirements are not sufficiently formulated as an integral part of the company's strategic targets. Of the organizations in the study, 76 percent do not consider the actual benefit of IT for the business when projects are setup and evaluated. IT is generally evaluated on meeting targets for being on-time and within budget, and not on whether it enables sales and growth objectives. When parameters to measure a project's success are not oriented towards sales growth, the value of IT for the business cannot be identified. Organizations are missing these necessary reference values.

Moreover, IT cannot be considered a growth lever when IT leaders are not included in strategic planning. Only 19 percent of the companies involve IT in the initial strategy phase of growth projects. Typically, IT staff is involved after the planning phase (33 percent) or in implementation (19 percent). Clear deficits also exist in terms of defining ownership for business process design. Although the business side claims to define their own processes, when it comes to specifying the processes, the detailed design is left to IT. To analyze the benefit contributed by IT, a detailed specification is required of a joint business case between the business and IT.

To tap this identified growth potential, companies need three key levers:

• Ensure transparency of the benefit IT contributes to the enterprise and develop a joint vision between business and IT
• Define benefit-oriented IT business models
• Deploy a stable and reliable platform with benefit-oriented functions such as CRM

It may be surprising that business intelligence and customer relationship management, both on the CXO agenda for many years, remain the biggest growth blockers. It can be explained perhaps by a general misalignment on the strategic value of these levers. Moreover, these growth blockers are both in the marketing / business development area, where the cultural gap between business and IT is the most apparent.

Reversing the problem falls not only to IT, but according to the leaders in the study, IT must develop a entrepreneurial mindset to become a key contributor to companies' strategic growth.

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See complete study methodology and results.