Operational Excellence In Information Technology Management Yields Competitive Advantage

Despite all the marketing “buzz words” from computer vendors, the true and lasting competitive advantage from information technology (IT) does not result from implementing the latest “gee whiz” technology or a “better mousetrap.”

Instead, experience demonstrates that it is achieved by a disciplined commitment to operational excellence in IT management throughout the company.

By applying a strict management discipline and following proven best practices, the IT function can be transformed from a difficult-to-manage cost center into a value-added service to the corporation. This approach has been proven to be a winning strategy throughout the highs and lows of business cycles and is an even more important discipline for companies weathering the storms of a severe recession.
The disciplined approach to IT applies across all industries since IT management challenges are largely generic and common to all sectors, regardless of the particular applications that might be installed. Having said that, it is also worth noting that the author’s practical experience is based on the application of the principles of operational excellence within a major integrated oil and gas corporation, where information technology services are an integral part of operations in exploration, production, distribution, pipelines, refining and marketing.

After many years of leading and managing virtually all aspects of IT in the corporate world, I have witnessed an enormous amount of change, both in the rapidly evolving technology itself, but also in the approach to effective management of these very necessary but complex systems. The good news is that IT has been a huge enabler of productivity and, with the powerful networks, computing platforms and sophisticated application environments available today, enterprises can do so much more (and do it much more rapidly and economically) than ever before.

With the advent of the personal computer, the Internet and other portable and wireless personal devices, businesses and consumers can employ an impressive array of capabilities such as information access, information sharing, knowledge acquisition, decision making, automation and market development that were not possible even just a few years ago. However, while much has changed, many of the challenges experienced by business leaders - as they try to make sense of the complexities, opportunities, risks and costs associated with information technology - remain the same.

Moreover, many companies, as they struggle with these challenges, are missing out on opportunities that go well beyond the immediate internal efficiencies that directly result from an operationally excellent IT. Information technology is critical to any business and while some business leaders may still consider it to be non-core or non-strategic, most CEOs do recognize that their businesses cannot survive and prosper without a well-functioning information technology service underpinning and supporting every transaction and activity throughout the enterprise.

The average company today spends between 4-5% of revenue on information technology and the figure can be 10% or more in industries highly dependent on IT, such as the financial and telecommunications sectors. Information technology is an integral and vital element of any organization, and a smooth-running IT operation will not only directly impact the bottom line, but it will also project a quality, professional image of the company externally.