The following is from the March 10, 2008, edition of The Wall Street Journal. This was written by Professor Amit Basu, the Charles Wyly Professor of Information Systems and chair of the Information Technology and Operations Management Department in SMU's Cox School of Business, and Chip Jarnagin, a founder of LatticeWorks Consulting, a Dallas-based management-consulting firm.
By Amit Basu and Chip Jarnagin
Some of the biggest names in the business world have used information technology to their competitive advantage: Merrill Lynch, American Airlines, FedEx, Barclays, to name a few. Despite their example, such companies are still exceptions.
Simply put, top executives at most companies fail to recognize the value of IT. It can help a company transform data from its operations, its business partners and its markets into useful competitive information. It can be the source of profitable innovations in the way a company interacts with its customers and suppliers. But there is still a tendency to think of IT as a basic utility, like plumbing or telephone service.
In many industries, IT consumes a significant amount of capital expenditures and gross revenue. Though recent research has shown that managing IT well can significantly increase a firm's profits and deliver substantially higher returns on IT investments, its potential is overlooked, and even its workaday application is often mismanaged.
The result isn't just missed opportunities -- it's also wasted money. Analysts estimate that hundreds of billions of dollars are blown every year on IT projects that fail to achieve the desired goals.
The reason for all this is the metaphorical glass wall that separates the IT group from the rest of the business at most companies. The wall prevents IT from being part of the discussion at the highest levels of company planning, robbing a firm of its full potential.
Success in the digital economy of the 21st century demands a strategic role for IT. And for that to happen, the glass wall between IT and the rest of a company has to be shattered. There are several steps that can be taken to achieve this. But to implement them most effectively, it is important to first understand the origins of the wall and what sustains it.
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