Only a small number of companies have IT that is effective (IT systems maximize the use of resources from a cost and quality perspective) and truly aligned with the business (projects get done on time and support business priorities). These successful companies record a compound annual growth rate over three years that is 35 percent higher than the average. They also spend less: aligned, effective IT can produce material cost savings.

To make IT effective, companies need to streamline their IT organizations in three ways: simplify systems to reduce costs, source IT hardware and services from the best location (inside or outside the company) and dramatically increase the business results from IT initiatives.

The ultimate goal of an effective IT organization should be to harness IT to business objectives to propel new growth; to allow business units to serve customers in ways that competitors do not. Companies will know they have arrived when:

  • The IT organization understands business priorities, supports business needs and is well staffed to respond to challenges
  • Business trusts IT capabilities and actively participates in–and often leads–all IT projects and investments
  • The IT organization proactively identifies business opportunities
  • IT capabilities are a core element of the business strategy