Spotlight on IT - Sustained Growth through Operational Excellence

Sustained growth through
operational excellence
Spotlight on IT
An Economist Intelligence Unit report
sponsored by SAPSustained growth through operational excellenceSpotlight on IT
Preface
Sustained growth through operational excellence is an Economist Intelligence Unit report sponsored by SAP. The Economist Intelligence Unit bears sole responsibility for this report. The Economist Intelligence Unit's editorial team conducted the interviews and wrote the report. The findings and views expressed in this report do not necessarily reflect the views of the sponsor. Ken Waldie was the author of the report and Dan Armstrong was the editor. Mike Kenny was responsible for layout and design. Our thanks are due to all of the survey respondents and interviewees for their time and insights.
March 2008
© The Economist Intelligence Unit Limited 2008 1Sustained growth through operational excellenceSpotlight on IT
Operational excellence: Spotlight on IT
executives have a crucial Getting closer to the businessIrole to plTay in promoting operational excellence. IT executives are playing a more proactive role than Improvement requires visibility. Visibility requires they have in the past. Nearly three-quarters of IT data. And it is the IT function that knows whether the respondents say they are striving to align systems right data exists, where it can be found, and how it more closely with business needs to support their can be captured and presented to the people who can company's growth. More than 80% believe this has make a difference. IT may not actively participate in contributed to higher customer satisfaction and about all aspects of operations. But without investment in 70% agree that it has increased margins. IT resources and commitment from an organisation's In interviews, some IT executives stressed IT professionals, it is unlikely that any operational that their proactive role is often driven more by excellence initiative can succeed. opportunity than by demand from operational Of the 946 executives who participated in the 2008 functions. When they view operations through an Economist Intelligence Unit operational excellence IT lens, they can often identify bottlenecks and survey sponsored by SAP, 182 (19%) come from the inefficiencies that may not be otherwise apparent. IT function. This paper-one of four function-specific Companies with effective operational excellence papers-is based on the IT responses and follow-up strategies generally empower action by those in a interviews with technology executives. The other position to innovate, and IT leaders say they act on function-specific papers focus on operations, finance, these opportunities when they can. and sales and marketing. "We know all the data that's out there and we know where it is", says George Hayward, Director of Information Systems for LaBarge Inc., a St. About the survey Louis-based manufacturer. "We'll go to a functional In a survey completed in January 2008, the Economist manager and say 'We can take these two systems Intel¬ligence Unit surveyed operational, financial, IT, and and join them together to give you a view of what's sales and marketing executives around the world on the role of happening in real time'". Managers appreciate this, operational excellence in their business strategies. The survey Mr Hayward says, and this outreach frequently gets yielded 946 responses from mid-sized companies with annual operations people engaged in developing further revenue of $20m-500m. Nearly one-third of respondents were refinements. "They'll say, 'You know, if could give me from the Asia-Pacific region, followed by 28% in Western Europe just one more indicator here that would save more and 26% in North America. Approximately 34% of the respondents time or help me react more quickly'." worked in finance, 24% in marketing and sales, 23% in operations As visibility is achieved, the role of IT is expected and 19% in IT. to diminish. "I hope we always will remain proactive", adds Mr Hayward, "but I see the impetus decreasing
2 © The Economist Intelligence Unit Limited 2008Sustained growth through operational excellenceSpotlight on IT
because the improvements we've already made will Enabling a single source of truthallow operations and other functions to innovate IT leaders are significantly more likely than other more effectively within their own ... [download for more]