How to supercharge your IT department

MIT's Jeanne Ross reveals what differentiates successful tech functions from their failing cousins...

...make resources available or work with IT to make sure that as the project is progressing that any obstacles that are preventing success are eliminated."

Shared services and the successful IT department

On average, business change drivers receive the majority (60 per cent) of their IT services through shared services, CISR research found.

"They are more reliant on shared services, and those shared services are more mature," Ross said.

"They have more discipline around defining those services, pricing those services, delivering those services and defining the role of the product manager and service manager."

Ross said that once organisations became proficient at establishing and running internal shared services centres for back office services, such as HR and finance, they are more likely to branch out into offering further shared services within the organisation.

"When you get good at back office you ask yourself 'Are there other things that don't qualify as back office that we all share?'" she said.

"For example at Procter & Gamble they have 250 product managers that share needs, and they have been able to move into offering shared services for things like packaging design."

Why organisations should steer clear of running shared services centres that provide services to outside organisations

While an organisation may be able to make money by expanding its internal shared services operation to sell services to third parties, Ross said that such an approach should be avoided.

"These do not tend to be long-term successes and there are obvious reasons why," Ross said.

"You have this problem of sub-optimising what you are doing internally in order to meet the needs of external customers.

"I don't think that we have ever learnt how to resolve that."

How analysing business data will provide organisations with a competitive edge

"Becoming really good at using information effectively is really hard but essential. It absolutely is going to be a source of competitive advantage," Ross said.

Before organisations can effectively analyse business information they need to first identify where the same information is being captured multiple times across the variety of databases that will exist within the average business, Ross said.

"We need them to be consistent - that's why there's so much emphasis on master data management," she said.

Once an organisation has simplified the way it captures data it can begin properly linking that data to other information that it has, and use it to gain insights into the best way to run that organisation.

"You read the literature and you would think that this had been going on since 1990, but this hasn't been going on because we couldn't work out how to do it. It's incredibly hard to do this well," Ross said.

An example given by Ross is 7-Eleven Japan, a Japanese retail store studied by CISR, which uses data such as what products sold yesterday or on the same day last year to help predict what goods are likely to sell on any particular day.

However, Ross believes that, in general, organisations are still too uncertain about the exact nature of the information that is being captured to be able to use it to gain truly useful insights.

"There's still much confusion around what are the attributes of the customer that we can all agree on across the organisation and how to capture those attributes consistently," she said.

"It's not like that's a technical problem - if nobody knows what they're talking about and you can't fix that technically."

There is also a lot of potential for organisations to gain useful insights from unstructured data: data that is not stored within the organisation's databases.

Ross gave the example of how 7-Eleven Japan could use weather reports to predict what kind of meals might be popular on a given day, for instance in general hot meals would be more likely to sell on a cold day.

However, said Ross, most organisations are a long way from being able to routinely analyse such information.