IT executives playing a more proactive role in driving operational excellence

The most important element of operational excellence is end-to-end visibility into operations, and IT executives are playing an increasingly proactive role in enabling this visibility, say executives responding to a global Economist Intelligence Unit survey completed in January 2008 and sponsored by SAP. The survey tapped 946 senior executives in mid-sized companies around the world, of whom 182 came from the IT function.

IT executives are uniquely suited to promote visibility because the IT function knows what data are available and how they can best be captured and presented to decision-makers, according to the study. This support of operational excellence is part of a broader trend in which IT executives are striving to better align themselves with the business. Nearly three-quarters of IT executives said they are trying to align systems to business needs to support their company’s growth strategy. More than 80% reported that this had resulted in higher customer satisfaction and about 70% said that it had increased margins.

For many IT leaders, the ultimate goal is to establish a “single source of truth”; or as one executive put it, to make sure that “everybody works off the same set of numbers”.

The study also found that IT executives are more likely than others to identify integration with external systems and partners as part of their definition of end-to-end visibility. About 19% of IT executives responding to the survey identified this as the most important component of operational excellence, compared with between 10-14% of those in other functions.

The IT executives who responded to the survey were separated into leaders, laggards and a middle group. The leaders did more to promote operational excellence in 25 out of 29 categories of activity. Based on self-reported data, the leaders were also ahead in most performance measures, such as revenue and margin growth, customer satisfaction and retention, and new product launches.

The survey found that compared with their counterparts in other functions, IT executives are:

much more likely to identify the provision of integrated single-view data for management decision-making as a key growth driver

twice as likely to say that transforming raw data into useful information is the most important way of improving efficiency

more likely to say that they had invested in business intelligence or analytics systems.

Sustained growth through operational excellence: Spotlight on IT

is available free of charge at www.eiu.com/sponsor/sap/opex/

The research is based on a global survey of 946 senior executives from mid-sized companies in various industries. It includes companies with annual revenues between $20m and $500m. The survey was conducted in November and December of 2007.

The Economist Intelligence Unit is the world leader in global business intelligence. It is the business-to-business arm of The Economist Group, which publishes The Economist newspaper. The Economist Intelligence Unit provides geopolitical, economist and business analysis on more than 200 countries, as well as strategic intelligence on key industries and management practices. With over 300 full-time professionals in 40 offices around the world, supported by a global network of more than 650 contributing analysts, the Economist Intelligence Unit is widely known for its unparalleled coverage of major and emerging markets.