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Equal rights for CIOs

A new study shows that companies will get the most bang for the buck from information technology when they treat it like any other part of their business.

Companies get the most bang for the buck from information technology when they treat it like any other part of their business, according to a new study by research firm The Hackett Group.

The report, "Profile of World-Class Information Technology," surveyed more than 2,000 companies, including more than 80 percent of the Fortune 1,000. The survey, to be released next week, rated companies according to their track record in using technology to achieve business goals, with the top 25 percent classified as "world class" IT performers.

General conclusions are that companies make better use of IT budgets when they don't let technology workers operate in a vacuum. By using technology changes as a prompt for reviewing overall business processes, top performers achieve better returns with fewer resources, said Allan Frank, co-author of the report and president of Hackett parent company Answerthink. Installation of a customer relationship management system, for example, could be an impetus for streamlining a company's procurement procedures.

"There has been a tendency to basically focus on the technology as a solution," Frank said. "What our data shows is that the power comes from integrating technology. You get more bang for your buck when you also deal with the other aspects of change.

"The results were better for those organizations that understood that implementing technology meant not just slamming in a new package...but really taking care of the organizational role."

Specific recommendations include giving the chief information officer parity with other top executives. Organizations where the CIO reported directly to the CEO had 17 percent lower overall IT costs per end user and significantly better records for major IT projects being delivered according to specifications. That's partly because a CIO with a solid sense of business goals will know better when a project isn't working out.

"The other part of implementing is knowing when to pull the plug," Frank said.

Companies also need to do a better job of measuring technology against overall business metrics, such as employee productivity and customer retention, according to the report. Successful companies impose standards wherever possible to reduce support costs, trim the number of supplier contracts that the company must maintain and boost the effectiveness of outsourcing projects.