Critical.
Authoritative.
Strategic.
Subscribe to CIO Magazine »

Blog: Four Qualities of a Top Performing IT Deparment

A new study by the Hackett Group contends there are four characteristics that link the solid financial performance of companies to how efficiently their IT departments run.

The survey, which polled 50 companies in the Fortune 1000, said 46 per cent of "top-performing" IT departments deliver higher operating margins and 49 per cent higher net margins to their companies.

The criteria for a top performer centered around the following four things:

1) Investment allocation. The IT department invests less in existing infrastructure and utilities, and instead focuses on innovation and improvement. 2) Project pipeline. Top performers don't invest in just any project. They are incredibly discerning, which allows them to keep the project list short and deliver projects on time. 3) Delivery performance. When a project gets started, it gets finished in the proposed time period. 4) Application portfolio management. You manage all of your existing systems well and efficiently (so well that they're just "there," rather than ever really being a problem or hindrance to business). This allows you to focus on any new, innovate apps that come down the pipeline.

Erik Dorr, Hackett's co-author of the survey, says these top performers also delivered 39 per cent more than their peers on return on assets and 43 per cent in return on equity.

He says that before IT departments can take the steps needed to become a top performer, however, they must first show that they can keep the lights on effectively, keep costs down, and use that as a baseline for being something that can help the business innovate.

"It's very much a gradual process of building the trust and showing you can deliver core services efficiently," he says. "Then they can use that as a basis, focusing on building the businesses from there."

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

Comments

Post new comment

The content of this field is kept private and will not be shown publicly.
Users posting comments agree to the CIO comments policy.
Login or register to link comments to your user profile, or you may also post a comment without being logged in.
Related Whitepapers
Latest Stories
Community Comments
Latest Blog Posts
Whitepapers
  • Traditional Backup is Dead - Are you prepared?
    Conventional backup and recovery approaches clearly can't keep up with ever-growing storage rates. It's time to take on a new strategy.
    Learn more »
  • Enhancing Decision-Making, Cost-Efficiency, and Profitability With Predictive Analytics
    Today’s managers must always look at the past, present, and future. They need reports on past performance to improve operational efficiency. Business intelligence (BI) platforms such as Information Builders WebFOCUS, are providing a unified decision-support environment where managers can retrieve and analyze data about past, present, and future activities. In this paper, we will discuss the incorporation of predictive modeling capabilities into the WebFOCUS BI platform, and highlight how this advanced functionality can dramatically improve decision-making, thus reducing risk and costs while increasing revenue and profits.
    Learn more »
  • SOA Best Practices and Design Patterns
    By learning from the experiences of those organisations that have been through the process and looking at the standard best practices of large‐scale technology implementations, success can come earlier and more dramatically. Read more now.
    Learn more »
All whitepapers
rhs_login_lockGet exclusive access to Invitation only events CIO, reports & analysis.