If there’s any issue that routinely frustrates executives in many organizations, it’s how to get a true fix on the value that information technology adds to the businesses it serves. IT is undoubtedly central to creating value and therefore continues to account for a rising share of total investment. But defining, measuring, and maximizing that value remain elusive. To throw light on this crucial issue, McKinsey collaborated with CIGREF1 to study the best practices of major French and international companies across various sectors.2
We interviewed 11 CIOs from French companies over a period from March 2007 to November 2007. The in-depth nature of these interviews provided valuable insights, as it allowed us to draw directly from the experiences of CIOs—many of whose companies have successfully used IT to gain competitive advantage. Analyzing their approaches to information technology helps to show how it can promote economic performance. We complemented these insights with international case examples.
Generating value-in-use
IT generates value at two complementary levels (Exhibit 1). The core asset value includes tangible items such as hardware and software, as well as softer benefits such as the IT organization’s processes and skills. IT’s vitally important value-in-use varies with a company’s...