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by Brendon Livingstone on 28 February 2012
Two weeks ago Equinox was delighted to host in Wellington Dr Peter Weill and Dr Peter Reynolds from the Boston MIT Sloan Center for Information Systems Research (CISR). As part of their visit Equinox held a lunch presentation to clients and invited IT and business executives at the new Wharewaka building on the Wellington waterfront.
Dr Weill presented on ‘Becoming More IT Savvy’. The presentation was very well received by the attending audience and some of Dr Weill’s points are summarised here in this post.
As chairman and senior researcher for the CISR, Dr Weill has co-authored a number of best-selling books on strategic IT topics, including ‘IT Savvy’, ‘IT Governance’, and ‘Enterprise Architecture as Strategy’. Dr Weill is ranked at number 24 in the ‘Top 100 Most Influential People in IT’ by Ziff-Davis. The MIT CISR has a mission of practical research on how digitisation enables organisations to thrive in a fast changing global economy. CISR is supported by a large network for sponsoring organisations internationally, who gain value from the real-world findings from the research.
Dr Weill defined IT Savvy organisations as those who have a clear operating model and a company-wide set of ‘best’ practices that enable automation, reuse and innovation. CISR research has shown that IT savvy organisations achieve on average 20% higher net margin, 30% higher return on assets and 3% greater growth when compared to industry medians.
To support this position, Dr Weill gave the example of the Japanese franchisee for 7-Eleven, whose operating model helped them become so profitable and successful that they ultimately bought out the parent 7-Eleven company. Their operating model is based on their view that they are an information broker between supplier and customer and not a retailer. Centred on a core digitised platform 7-Eleven stores are outperforming competitors with a 30% retail margin. Workers within each store department are empowered to decide what products they will stock on a given day. Working with tablet devices and automated supply chains workers quickly identify the products that are selling on a daily basis and change supply to mirror demand in almost real-time.
Dr Weill gave a similar example of Amazon.com who run hundreds of A-B tests a week to determine which small changes to their website increase purchase conversion rates. Changes that are successful can be rolled out to all users across their platform in a matter of hours. Dr Weill positioned that today strategy becomes less important, but the ability to gather and agility to respond to real-time information becomes vital.
Dr Weill went on to show that IT savvy organisations achieve superior results by three obsessions:
- Fixing what is broken by actively managing the enterprise IT portfolio and establishing light-weight governance
- Creating a digitised platform for business execution and innovation
- Exploiting the platform by using the platform for agility and innovation and empowering employees with world-class information and systems.
Dr Weill concluded with the view that organisations need to exploit their IT platforms by rapidly testing and learning, by providing a voice to their customers, and by having a clear understanding of the data about their organisations.
