Benchmarking will become ‘de rigeur’.
Conventional wisdom says there must always be a tradeoff between efficiency and effectiveness, but world-class IT organizations are more productive than their peers, with fewer full-time equivalents (FTEs) per 1,000 end-user equivalents, and their costs are 15% lower. In fact, the typical company can save up to $26 million by closing the gap to world-class IT performance. Moreover, the benefits of world-class IT performance accrue not just to the function itself but also to the company as a whole. Due to a focus on reducing needless complexity, more transactions are completed electronically, leading to lower labor and operational costs for business partners as well as suppliers and customers. Although the journey to world-class performance may take five or more years, a company is likely to see marked improvements within two.
While “world-class performance” is often used colloquially, The Hackett Group’s empirically based research methodology defines world-class IT organizations as those that are in the top 25% of organizations as measured against a set of efficiency and effectiveness metrics. Also, conventional wisdom says that IT organizations inevitably must accept some efficiency in exchange for more effectiveness, but world-class IT organizations defy this premise. They are able to outperform the majority of other companies in The Hackett Group’s IT benchmark database (called the “peer group”) in efficiency measures such as cost, complexity and project delivery performance as well as effectiveness measures such as project ROI, business enablement and extent of process automation.