Do it Smart: Seven Rules for Superior IT Performance

A decade ago, manufacturing companies had visions of paperless offices, automated plants, and virtual enterprises. But the euphoria quickly evaporated when these visions failed to materialize. Now, from in-depth interviews in a worldwide survey of seventy manufacturing firms, a research team from the prestigious consulting group McKinsey & Company concludes that, far from being a failure, information technology (IT) can be a vital strategic weapon in the manufacturing sector, just as it has proved to be in service industries.

In "Do IT Smart," experts Rolf-Dieter Kempis and Jurgen Ringbeck along with the McKinsey team identify four cultures of IT users -- stars, big spenders, cautious spenders, and laggards -- based on how efficiently and effectively the users manage IT. The stars stand out because their strong command of IT means they are better able to manage core processes such as R&D, sales and service, and order processing, which in turn produces tangible payoffs in profitability, growth, and market share. From their study of star performers, the authors formulate seven rules for developing a superior IT organization. First, they argue, managers must make IT a top management issue and, second, a priority in product development. IT must be viewed as a strategic tool so that IT strategy can be aligned with business strategy. Clear objectives must be set, and core business processes redesigned. Warning that IT is reaching saturation in administrative applications, the authors describe how it is far more profitable to integrate IT into marketing, sales, and customer service. Finally, they describe how all these elements must be brought together into a lean, customer-orientedIT network.

McKinsey's breakthrough study shows that as organizations are increasingly overwhelmed with data, IT will become more of a dividing line between the winners and the losers. IT stars will make quantum leaps in effectiveness, while poor management of IT results in a cost explosion. Managers and information officers who want their business to keep and gain the competitive edge IT offers need this unprecedented insight into how to "Do IT Smart."