Moving Walkway

I found this article useful in spelling out three ways to look at IT adding value. Each one is geared towards a different goal. In the past, I’ve looked at companies and asked “how do the view IT and IT spending/investment?” In many cases it was clearly one of the three identified here: cut costs at all costs (scale), meet the business’ near term requirements (speed), or shoot for the moon/change the world investment (innovation).

What this article in the Fall 2006 issue of McKinsey on IT points out is that every company should have a mix of these, and depending on the high order goals of the organization, they should balance the budget differently (shifting weight between the three).

You can get the whole article here:

The McKinsey Quarterly: Managing IT for scale, speed, and innovation: Centralizing IT with other functions in a shared-services unit reduces costs and improves productivity but can distance business units from technology capabilities they need.
To promote speed and innovation, companies must govern IT as they govern their businesses: with different rules and metrics for different parts of the organization.
Basic IT services should be integrated with other back-office operations and managed for efficiency at scale; IT services that help businesses develop new products should be integrated with those businesses.
Most companies should invest IT resources in research that could deliver novel products and other innovations to open new markets.