"The debate about business and IT alignment is over," said John Sviokla, Diamond's vice chairman and managing director of innovation and research. "Eight of 10 C-level executives agree that information technology is strategic to the success of their business, and that IT could significantly alter their core products or services. But we found huge gaps that explain why companies still find it hard to translate good intentions into real results when they invest in IT."
For example, IT is still not integral to strategic planning. The study found that only 30 percent of C-level executives believe that their company CIO is involved in the strategic planning process.
In addition, both business and IT leaders underestimate the importance of some key management practices that are fundamental to getting value from every dollar spent on IT. About half of the respondents downplayed the importance of enterprise architecture (EA) planning and design, program management skills, and the governance required to convert business/IT alignment into high-value IT investments.
"The result," said Chris Curran, CTO at Diamond, "is that far too many IT projects fail to deliver as promised. About half (47 percent) say one in five projects fails to meet initial user expectations."
Room for Improvement in Strategic Planning Process
Healthcare, Financial Services Firms Have a High "Digital IQ," Utilities Lag
By analyzing the responses from 10 different industries across two dimensions -- strategy and operations -- Diamond was able to calculate how different industries stack up in terms of their commitment to information technology. Healthcare ... companies tend to view IT of both strategic and operational importance and are confident in their ability to harness IT to power their companies. Financial services, insurance, and high-tech firms also demonstrated a high digital IQ. The average utility industry digital IQ was lower than any other industry.
"Companies with the highest strategic IQ scores focused on how technology might force them to change their core products or services," said Curran. "They clearly understood IT's potential impact on operations. And they placed high importance on providing excellent after-sale customer support.
"Companies with a high operational IQ reported their IT operations have changed significantly over the past three years, and they intend to continue innovating in that area," Curran added.
Impact of Emerging Technologies
Data mining/data analysis is the tool most often cited (25 percent) as a means to transform the business. Approximately 40 percent of respondents believe that several technologies -- including data mining/analysis, search technologies, and service-oriented architecture -- are ripe for growing the business. Finally, biometric identification/identity management and virtual collaboration/presence technologies are more commonly viewed as technologies with the potential to help run the business more efficiently.
The Diamond studysurveyed 456 C-level business and technology executives at large companies (90 percent of the companies represented had annual revenues greater than $1 billion) to measure attitudes about a variety of strategy, management and technology issues.
