IT a Critical Enabler for Achieving World-Class Performance in Procurement, Finance
By Editorial Staff Created:
World-class IT organizations spend 7 percent more than peers, but spending generates strong ROI in other SG&A areas, Hackett finds
Strategic Alignment — To ensure IT strategic alignment and elevate the role of IT as an enabling strategic asset, world-class IT organizations are twice as likely as typical companies to have a chief information officer (CIO) who reports to the CEO or chairman rather than reporting to the chief financial officer (CFO) or another functional executive. World-class CIOs are also 48 percent more likely to be a member of their company's primary management committee.
Complexity Reduction —The human and financial costs of maintaining multiple data centers, packaged applications, customizations, operating systems, programming languages, hardware/telecom standards, etc., contribute to a marked increase in total IT cost. Reduction of unnecessary IT system complexity — hardware, software and networks — directly reduces complexity, liberating time and money for investment in value-adding activities. For example, world-class procurement organizations are more likely to have a single master database for suppliers and items, providing executives with a more accurate picture of where things stand. In finance, world-class companies are 28 percent more likely to generate management reports from a centralized data repository, improving information access and offering an enterprise view of performance while reducing time spent searching for and cross-checking data from multiple sources.
Cross-functional Partnering —IT organizations (and their external service providers) need to work as business partners to make sure that applications delivered are capable of achieving business goals. A key part of this is maintaining high user adoption and internal client satisfaction rates. World-class IT organizations use a project management office (PMO) to manage 90 percent of all projects, making them 130 percent more likely to do this than typical companies. Using a PMO provides better visibility, coordination, and planning on projects, which is why the level of PMO adoption is a key predictive metric of world-class performance.