Harvard Study: IT Matters

The Harvard Business School study is a multi-country study that measured IT capability at more than 150 large enterprises and found that IT is a key factor in enterprise success, a professor says.

NEW YORK—IT matters. According to an upcoming Harvard Business School study, higher IT capability directly correlates with superior revenue growth.

At the SIA (Securities Industry Association) Technology Management Conference here, Marco Iansiti, the David Sarnoff Professor of Business Administration at Harvard Business School, and Julio Gomez, managing director of financial services research at Keystone Strategy in San Francisco, shared some of the findings of their joint study in a workshop titled "IT Matters."

The Harvard Business School study, which will be published later in 2006, is a multi-country study that measured IT capability at more than 150 large enterprises and found that IT is a key factor in enterprise success, Iansiti said.

Iansiti said IT is strategic for several reasons. For one, IT amplifies the impact of people and drive productivity, he said.

In addition, IT gives enterprises insight to set strategy; provides enterprises with better control to execute strategy to better manage operations, finance, sales and product development; and drives profitable growth, he said.

The bottom line, both Iansiti and Gomez said, is that the study showed, based on surveys of IT executives, that there is a clear correlation between effective IT operations and growth for an enterprise.

Iansiti said some of his Harvard Business School students, along with Keystone, helped with the study. And Microsoft also pitched in with help on the project, he said.

"We worked with Microsoft on some of this," Iansiti told eWEEK.

"They helped us with some of the scenarios," which the team used to gain insight into how much IT played into overall productivity, he said.

Indeed, Microsoft "actually helped us to come up with the idea for the study and to work out the theme," Iansiti said.

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In particular, Iansiti said his team worked with many individuals involved with the Microsoft "People Ready" campaign, which Microsoft announced in March.

"A business that is People-Ready gives its people software tools that enable them to collaborate and work together globally, to contact and serve customers instantly, and to streamline and reinvent processes intuitively," said a Microsoft document describing the campaign.

Iansiti said Harvard Business School was interested in working with Microsofts "People Ready" staff "because they are looking closely at where business and technology are going" and how IT can make a difference and impact growth.

Meanwhile, Gomez said IT lets enterprises get their business processes put in "in a leverageable, scalable way. Its the ability to scale up the business at a minimally incremental cost."

Moreover, as it applies to brokerage companies, Gomez said the study showed that brokerage executives said their representatives most valued IT in the form of communication and collaboration technologies.

In addition, the study showed that financial services firms have the opportunity to employ IT to differentiate their enterprises in such areas as financial management, accounting systems, forecasting systems, reporting, integration and optimization, transaction management, compliance, sales and other areas.

And Gomez said IT managers surveyed for the study found governance, innovation and execution all about equally important priorities.

Plus, nearly all IT managers surveyed said they plan to increase outsourcing, particularly in the areas of application development and IT infrastructure, Gomez said.

Meanwhile, the study is ongoing, he said. But, as it stands, "this work goes a long way in providing a link between IT and growth," Gomez said.

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