It's The IT, Stupid! How IT Savvy Do Business Executives Need To Be?

Earlier this year I told you the story of a business executive who told us how critical is that business — not IT — drive process improvement initiatives. Here is another interesting case my colleague VP and Principal Analyst John Rymer and I have just witnessed.

It is the story of a business organization that developed an IT strategy based on three best practices:

  1. The core business processes would be implemented on a single modern, flexible platform.
  2. The platform would be service-oriented to ensure clear accountabilities and flexibility for future needs.
  3. The platform development and operations would be outsourced to a shared services provider.

We reviewed the strategy 10 years after it was conceived to find out that it has not yet achieved its top strategic goal. More disturbing:

  • The development investment has been far greater than expected at the outset.
  • The annual cost of IT operations doubled versus the base line.
  • The reliability of the processes converted to the new environment went down.
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