MIT Sloan Management Review

After pouring millions of dollars into in-house data centers, companies may soon find that it's time to start shutting them down. IT is shifting from being an asset companies own to a service they purchase.

INTELLIGENCE: RESEARCH BRIEF: Vigilance is the key to avoiding potential organizational nightmares.

Throughout an organization, individuals make decisions daily that influence the need for and the value received from information technology. A simple one-page framework can help companies allocate IT decision rights and accountabilities so that individual IT decisions align with strategic objectives.

Information and knowledge management models that exclude the influence of national and regional culture seriously undercut their potential effectiveness.

Organizations are increasingly able to gather and process information from a variety of new sources. But competitive advantage will still belong to those who know how to use it.

The benefits of Web services will be profound, but not easily or quickly obtained. Building application-to-application links will require not only excellent technologists but skilled managers and leaders as well.

Most companies today are using precious little of the computing power available to them through the machines and software they already own. PCs, servers and mainframes all sit idle much of time, while the people who operate them are away from the office or the plant. And as a recent IBM Corp. study points out, [...]

Many companies have struggled to design IT systems, databases and content repositories that provide their employees with easily accessible and relevant information. The authors urge organizations to emulate the strategies of Google, eBay and Amazon.com, whose core competence is based upon making it easy for customers to find what they want — quickly, accurately and usefully.

Research at 130 companies shows that only 17% are at the advanced, or synchronized, stage of IT portfolio management, meaning the rest are not optimizing IT investments. The authors note that in synchronized companies, senior business managers understand how IT affects strategy and the bottom line, and CIOs have learned to communicate IT goals in terms non-IT executives understand.

For managers seeking to abandon follow-the-pack IT investment, the author offers the example of Inditex Group, a clothing manufacturer in northwestern Spain, best known for its Zara stores. Inditex demonstrates that a company can select, adopt and leverage IT while spending very little on it. He lays out five general principles that underlie Inditex”s remarkable success with targeted technology spending.