An interesting article in Mckinsey Quarterly reinforcing the point that information technology does not add value in and of itself. The key is the quality of organizations' management, including, but not limited to, their management of information technology.
This article from Wharton has some interesting insights on the challenge of realizing value from IT investments.
I recently was part of a meeting identifying best practices for managing IT investments (or more accurately investments in IT-enabled change). There was some discussion that we shouldn’t use the term “IT investment” as this is not how most organizations currently think. While I am not sure that I totally agree with this, there certainly is some truth to it. The fundamental issue here is that if we are to resolve the “IT value” dilemma, we can’t just “pussyfoot” around hoping that we don’t make anyone feel uncomfortable. A definition of insanity is to keep doing the same things the same way and expect different results. If we are to realize the full potential of IT-enabled change we must challenge how things are done today and show leadership in helping organizations to manage their investments in IT-enabled change very differently.
In The Information Paradox we said that the way that organizations use IT has changed but that the way they manage it hasn't. While that statement is correct, and, unfortunately, still is the case in all too many organizations, it is too narrow a statement and too focused on IT. The real problem is that the way that IT enables the creation of value has changed but the way that organizations manage the value creation process (to the extent that they even do so) has not. IT enables the creation of value by providing information and supporting processes that cut across traditional organizational boundaries and by empowering employees to cut aross those boundaries. The value creation process (again, to the extent that there even is one) is still constrained by vertical or siloed organization structures and a hierachical command and control governance and management approach. A fundamental redesign of corporate governance is required if we are to come anywhere near realizing the full potential of IT-enabled change.
A recent transatlantic flight allowed me time to catch up on my reading. In a May 2005 Optimize magazine article Erik Brynjolfsson of the MIT Sloan School describes the results of his latest research stating that it "suggests that whether IT improves productivity depends primarily on the complementary organizational investments that companies make in addition to their IT investments." I absolutely agree with this conclusion. It is not however new. This was the underlying premise of The Information Paradox published in 1998 and since then numerous books and articles have made the same point. My question is how many more books and articles have to be written, and how much more research has to be undertaken before business leaders recognize the "blindingly obvious" and do something about it?
