I've known Peter Weill, co-author of IT Savvy: What Top Executives Must Know to go from Pain to Gain, since our days on the faculty at the Melbourne Business School. I was a visitor during my summers, while Peter and his colleague Marianne Broadbent were full-timers and doing the top research focused on IT business value. Peter is now Chairman of the Center for Information Research at MIT. (I hope to follow up with Marianne soon!) Of course the title of Weill & Ross' new book, IT Savvy, jumped out at me given my colleagues' and my work on Systems Savvy. I find IT Savvy to be a beautiful, more organizational-level, companion to Systems Savvy. Systems Savvy: The human capability to grasp the possible functions of technology tools and organizational practices and how these might be meshed to best effect. People with SysSavvy understand that technologies and practices are intertwined and they know how to make design adjustments to both the technology and the practice to effectively weave them together. We see SysSavvy as distinct from expertise, but more on that when our data are in.... Systems Savvy is critical to the ability to practice TOP Management. IT Savvy: "...a characteristic of firms and their managers reflected in the ability to use IT to consistently elevate firm performance. Like savoir faire, IT savvy looks effortless from the outside. But IT-savvy firms distinguish themselves from others by building and using a platform of digitized processes" (p. 23). My reading of this is that IT Savvy firms have managers who themselves have Systems Savvy. While Systems Savvy can be used beyond strategic information technology -- when focused on the strategic issues described by Weill & Ross, the benefits to the organization are clear. Weill and Ross note that IT Savvy is a rarity:
IT-savvy firms are not necessarily high-tech firms. In our research we have encountered only a small number of IT-savvy firms. Without exception, these firms use IT to “wire in” core transactions, and they use the data from their core transactions to inform decision making. Our list of IT-savvy firms includes highly successful new-age e-businesses such as Amazon, eBay, and Google. But long-established brick-and-mortar firms can also become IT savvy. Take, for example, 7-Eleven Japan, United Parcel Service, and Procter & Gamble (p.24).Though rare, IT Savvy matters:
Our research found that firms that are above average on both IT savvy and IT spending have margins 20 percent higher than industry average. In contrast, firms with less than average spending and savvy have margins 32 percent lower than their industry (p.121)What does it take to become IT Savvy? A business transformation that includes:
- Fixing what's broken about IT - broken accountability and decision making
- Building a digitized platform - a base that provides stable core operations
- Exploiting the platform for profitable growth - leading change and driving value from this new asset
The top thirty leaders of the company each sit on two or more strategy teams so they can inform their colleagues of services and needs within their own functional area while learning about the operations of other functional areas. The teams propose enterprise IT projects, which are reviewed by the firm’s executive committee in establishing project priorities. Around 80 percent of Southwest’s technology projects are aligned with one of the strategy teams. pp. 87-89.I used McAfee's Enterprise 2.0 book in my Organizational Design course this term. I think IT Savvy is the perfect next step (rubber meeting the road) for those students who continue on to my Managing Technology & Innovation course. My highest praise: IT Savvy was the first professional book to make it to my B&N Nook.