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Managing IT as a Business
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Managing IT as a Business

A Survival Guide for CEOs

Mark D. Lutchen
Wiley, 2003
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Editorial Rating

7

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  • Applicable

Recommendation

In the fall of 2003, the Harvard Business Review published an article advancing the proposition that "IT doesn’t matter." The article’s author suggested that because IT was now a commodity, and everyone had it, it no longer conveyed any distinctive competitive advantage and therefore, strategically, did not matter. In fact, at many companies, IT doesn’t matter as much as it should - not because it is a commodity that other companies also use, but because most companies don’t get every potential benefit from their IT. To advance your business agenda effectively, make IT a real part of the business. Author Mark D. Lutchen shows managers, particularly CEOs and CIOs, why IT is not fully a part of business at the moment, and what it will take to turn IT into a competitive, strategic asset. getAbstract.com recommends this useful, well-written, clearly organized book to anyone whose job involves decisions on IT budgets, organization, investments or strategy.

Summary

IT Spending and Investment

The newly appointed chief information officer (CIO) at a major corporation wrote a memo that stressed these points:

  • Information technology (IT) investments and development lacked strategic vision.
  • IT expenditures were diffuse and uncoordinated.
  • Management saw IT as a cost, not as a strategic, competitive, financial enabler.
  • IT leadership was scattered and weak.
  • Although IT is a very big investment, firms do not manage IT as a business.
  • To integrate IT effectively with your business, elevate the CIO's position.

The points in that memo hold true for many companies. During the 1990s, a Fortune 500 company might easily have spent $200 million to $1 billion a year on IT. The business case for IT spending and investment was not exactly ironclad. Some rationales at the time were:

  • Y2K compliance — Preparing for the millennium and the dreaded obsolescence of systems that might not even adjust to the "2000" date.
  • Euro-convergence — Getting ready for European currencies to coalesce as the euro.
  • Fashion and fad initiatives — These included Enterprise Resource...

About the Author

Mark D. Lutchen is the former global CIO of PriceWaterhouseCoopers and currently leads that firm’s Business Risk Management Initiative.

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