It’s not easy to be a legacy company these days. You’re facing off against more nimble, digital-born upstarts fluent in IT language and unhampered by years or decades of bricks, mortar and mainframes. And you’re expected to do everything better.
But if that’s where you find yourself, you’re in good company. Most businesses today are still mired in what Meade Monger, managing director of AlixPartners, calls the “silos-and-spaghetti” phase: a patchwork of antiquated systems that don’t work well together, with one or more heroic IT managers trying to respond to current demands by putting a better face on the front end. “But on the back end, it’s still a legacy mess,” Monger said.
“Future-ready” companies, on the other hand, that have embraced digital and invested in infrastructure that enables operational excellence and a great customer experience, are surging ahead. Future-ready firms boast net margins 16 points higher than their industry peers, while the net margins of those in the silos-and-spaghetti phase are 5.1 points lower, according to data from AlixPartners and MIT’s Sloan Center for Information Systems Research.
LinkedIn Co-Founder Reid Hoffman and co-author Chris Yeh share secrets for scaling your business at the CEO2CEO Summit.
Dec. 6, 2018 | New York City | Details and Registration today!
One of the key differences is how the IT budget is allocated. “High-performing firms are investing much more in infrastructure today,” said Leslie Owens, executive director and MIT CISR senior lecturer. Lower-performing companies are spending more than 70 percent of IT budgets running the business rather than investing in the future. “And they’re falling further and further behind,” added Monger.
Another key difference between the leaders and laggards is how they view IT. Future-ready companies don’t centralize all IT decisions in one siloed department, but rather see IT spend as a part of every department’s budget and strategy. “In a lot of companies, you have the business people and technology people not as connected as they should be—the CEO gives the CIO the budget, and the CIO makes decisions,” said Monger. “But that’s not the way it should be. It should be a collaborative process around how you invest in technology.”
The pathways from silos and spaghetti to future ready range from gradual slope to more radical spike, depending on the company’s business, its customer experience and the threat level from digital-born competitors. But there’s no question all companies have to make the leap, sooner rather than later, to keep pace with digital natives, said Monger, adding that retailers could take a lesson from industrial companies, which are focusing more on building digital infrastructure in warehouses and supply chains. “As a result, they’re actually more future ready than retailers.”
Chief Executive Group exists to improve the performance of U.S. CEOs, senior executives and public-company directors, helping you grow your companies, build your communities and strengthen society. Learn more at chiefexecutivegroup.com.
0
1:00 - 5:00 pm
Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process
Executives expressed frustration with their current strategic planning process. Issues include:
Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns. They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning. Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process. This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented. If you are ready for a Strategic Planning tune-up, select this workshop in your registration form. The additional fee of $695 will be added to your total.
2:00 - 5:00 pm
Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations.
Limited space available.
10:30 - 5:00 pm
General’s Retreat at Hermitage Golf Course
Sponsored by UBS
General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.
The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.
