fredag den 14. juni 2013

Leveraging Information Technology in your company

Excerpts from a McKinsey&Company article, June 2013| by Paul Willmott

Some organizations are creating new technology forums, building the expertise of corporate directors, and strengthening IT governance—all with the aim of allowing boards to guide management by asking the right questions about technology.1 1.For more information, see Michael Bloch, Brad Brown, and Johnson Sikes, “Elevating technology on the boardroom agenda,” McKinsey on Business Technology, Number 27, Fall 2012. But what are the right questions at a time when digital technologies are beginning to disrupt industries and mastering these technologies may be the key to long-term survival and success?

How will IT change the basis of competition in our industry?

Questions to ask:
  • Who are our emerging competitors?
  • How is technology helping us win against traditional and new competitors?
  • How can we use technology to enter new markets?

What will it take to exceed our customers’ expectations in a digital world?

Customers are being educated by e-commerce leaders like Amazon and Apple to expect an ultraconvenient experience, personalized in real time. Attackers in many industries are differentiating themselves from incumbents through convenience and service. Digital finance company Wonga, for example, settles loans in 15 minutes.

As a result, customer expectations are rising quickly.

Questions to ask:
  • How does our customer experience compare with that of leaders in other sectors?
  • What will our customers expect in the future, and what will it take to delight them?
  • Do we have clear plans for how to meet or exceed their expectations?

How will IT improve our operational and strategic agility?

IT has a significant effect on operational business agility (for example, time to market for new products), as well as on strategic business agility (for instance, the ability to extract synergies from an acquired business or the ability to connect systems to a distribution partner).

Questions to ask:
  • How does our business and IT agility measure up with that of our competitors?
  • How do our IT plans increase our business and IT agility?
  • Are our sourcing relationships increasing or reducing our agility?

Do we have the capabilities required to deliver value from IT?

Technology alone delivers no value. It’s the combination of a clear strategy, the right technology, high-quality data, appropriate skills, and lean processes that adds up to create value. Any weak link in this chain will lead to poor value delivery from IT.

Questions to ask:
  • Do we have the capabilities needed to drive full value from our existing IT systems?
  • What are the weakest links in our capabilities?
  • Do we have enough IT-literate executives?
  • What is our plan for upgrading capabilities?

Are we comfortable with our level of IT risk?

Cybersecurity is a significant and growing IT issue. Every large company’s security has been breached, and most executives have a poor understanding of the risks. But cyberattacks are just one category of IT risk. A failure of a small software component can cost a company a lot of money in customer compensation. IT systems can also cause business-conduct risk—for instance, if automated recommendations to cross-sell products conflict with regulatory requirements.

Companies need a comprehensive system for managing IT risk that assesses the full range of risks (for example, hacking attacks, vendor failure, and technical failure) and addresses the root causes, which include redundant technology, incorrect policies, poor processes, and insufficient oversight.

Questions to ask:
  • Do we have a comprehensive understanding of the IT risks we face?
  • How is our level of IT risk measured, and is it aligned with the company’s overall risk appetite?
  • How are we reducing our IT risk on an ongoing basis?
  • Who is responsible for overseeing the level of IT risk?

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