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HP Software's community for IT leaders // July 2013
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Leader or laggard: How do you rate?

HP surveyed 650 companies to find out who’s doing IT right. The leader of the project tells us what CIOs can learn from the best.
 
Is your IT helping your company drive revenue? HP wanted to learn more about the difference between market leaders and laggards in terms of IT strategy. So we conducted a blind survey of IT decision makers from more than 650 companies around the world in a variety of industries, asking them about their IT strategies, alignment with fellow C-level executives, and more. Now you can see how you stack up with HP’s interactive assessment tool, based on the research results.
 
HP Worldwide Senior Marketing Manager Daniel Dorr, who spearheaded the research effort, recently shared top insights from the results, and some of the key correlations between enterprises with high revenue and their IT capabilities.

Q: Are there general trends that emerged among the leaders in the “leaders vs. laggards” research you led?

Daniel Dorr: Of the 50 IT attributes we looked at among leaders, eight bubbled to the top as significantly different. The first four have to do with information management. Leaders are doing a lot better with information than their peers, particularly in the areas of automation and standardization. Leaders tend to automate the following:

  • Audit and compliance
  • Information management strategy
  • Use of business intelligence in decision making

Q: What was the fourth primary attribute common to leaders?

DD: The fourth attribute was a high degree of clarity and agreement on KPIs. On average, laggards reported only a moderate clarity and agreement on KPIs. This might mean that the business has very clear KPIs for profit and growth, whereas IT might have KPIs on budget alignment, or time. So you’ve got two parts of the organization with different sets of KPIs. There’s no alignment. As a result, we’ve seen IT departments working on business services that are fast and cheap—get it done and throw it over the wall. But those tended to underperform. In the case of the leaders, IT is looking to align KPIs to the business and add value.

Q: Did any industries stand out as leaders?

DD: One of the leaders by industry—especially as relates to information management—was retail. I think that ties into the leaders’ success with data management. Retail leaders tended to use both unstructured and structured data in their information management strategy, while laggards didn’t. It makes sense that retailers would show up as leaders, since they have to deal with consumers—and a lot of external attributes (unstructured data) can affect sales, like the weather, local events, and so on.

Q: Are leading retail companies maintaining their edge through use of social media?

DD: Yes—along with clear information management strategies. The companies that use social media effectively use it to learn about their customers, and what’s important to them, just as much as they use it to communicate a message. In retail, that means listening with interest to what people are saying. You can learn from conversations people are having about your brand in social media, and join that dialog. In forward-looking organizations, results of those discussions get pushed into every aspect of the company.

Q: Can you give examples?

DD: GUESS?, Inc., is a great example. GUESS uses HP Vertica’s real-time information analysis to provide customer data to all areas of the company—from floor managers of retail stores to the sales force to the finance team. They are using big data to understand what’s important to their customers, and to act on that much faster.
 
NASCAR is also using structured and unstructured data to engage with customers—in this case, a global fan base. NASCAR is listening to what people are saying globally about the brand right now through its Fan and Media Engagement Center, developed in partnership with HP.

Q: In which key areas are laggard companies falling behind?

DD: It’s essentially a flip—where the leaders are excelling, the laggards are not keeping pace.

Q: How can CIOs in lagging organizations improve?

DD: They can improve by doing three things. First, align business and IT with consistent KPIs across the organization. If the business is being measured on revenue, profitability, and agility, IT needs to be measured on that as well. That should be a no-brainer. If you haven’t already been having this discussion with the CEO, it should be on your agenda for your next one-on-one with him/her.
 
Second, look at your applications environment. You need to uncover opportunities to standardize. Leaders are moving away from customization. Standardization offers greater efficiency and lower cost. It also provides an opportunity for faster integration of various pieces of the business. Twenty to twenty-five percent of CEOs are looking at mergers and acquisitions as part of their strategy in 2013. The more custom your environment, the harder it is to integrate an M&A opportunity.
 
Finally, you’ve got to have a strong information strategy. If you aren’t looking at ways to automate decision making with the data you have, you need to do that. If you have already done that, you need to augment it with more varied data sources that include the full spectrum of big data and structured and unstructured data.

Q: How do lagging CIOs catch up?

DD: If you and your CEO aren’t talking about the role IT can play in driving business metrics, and measuring IT against those metrics, it’s a conversation you need to have soon. Either you’re going to keep producing low-cost junk quickly, and your company’s going to fall further and further behind, or your CEO will look for a CIO who’s a business leader, and you’ll get replaced.

Q: How important is external benchmarking for CIOs?

DD: The number one benchmark should be the value that you’re offering inside your company. Value is the key term here. It’s not budget, necessarily. It could be results from a variety of sources—surveys from internal customers, for example. But it has to center around some sort of value metric. You may be a leader today, but if you’re not providing the value your business needs, you won’t be tomorrow. The CEO is measured against revenue and profit. CIOs often are, but if they’re not, the way to start is by aligning with the business there. The goal of our survey was not to provide answers, but rather to stimulate a discussion between business and IT. There are a lot of ways the survey results can translate in your company and help you add value for the business.
 
HP Worldwide Senior Marketing Manager Daniel Dorr leads HP’s CIO Agenda workshop program. Rate your own IT organization against Dorr’s research by taking our quick leaders vs. laggards IT Leaders assessment.


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IT leader assessment

This tool evaluates the correlation between IT attributes and business success and, based on how your answers compare with average scores, will advise you where to invest in IT.

It is based on data HP collected from 650 global companies about a range of IT characteristics (server capacities, approach to information management, security, BYOD, etc.) and how they correlate to revenue gain. This assessment will compare your answers to the average scores in that study.

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