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IT Savvy: Making IT a strategic asset to outperform competitors

2. Building a digitized platform

Once you've changed your approach to IT, you're ready to build a digitized platform. A digitized platform is a coherent set of standardized, IT-enabled business processes along with supporting infrastructure, applications, and data. To build a digitized platform, management must start by identifying what business processes are not changing. A digitized platform standardizes and automates these processes, thereby increasing reliability, decreasing operational cost, and ensuring quality. By automating what's not changing, a digitized platform allows management to focus attention on what is changing in the marketplace. Aetna's platform development initially focused on the data that would allow integration of business processes to meet customer needs. Management defined five categories of shared operational data: Claims, Enrollment (or Member), Product, Plan, and Provider. After several years of developing data repositories and reengineering business processes to better use that data, Aetna's platform remains a work-in-progress. However, the platform is continuously improving the decision-making processes and operations that rely on this data.

At Aetna, the digitized process platform encompasses the daily servicing of customer needs, ranging from opening an account to settling a claim. Aetna has built a solid technology base and layered it with reliable, predictable business processes for daily transactions—but the reliability and predictability of daily transactions are only the beginning. Like all IT-savvy firms, Aetna uses the data generated from its core transactions to inform and empower decision-makers.

3. Exploiting the platform for profit and growth

Fixing what's broken and building a platform are both demanding undertakings, but the bigger challenge is leading organizational change and driving value from the digitized platform. To cash in on your platform, you will be changing individual roles, organizational structures, and the organizational culture. This is a fundamental business change and, thus, a major leadership challenge.

At Aetna, Ron Williams emphasized the need for data-driven decision making and spearheaded the effort to put consistent, reliable data in the hands of managers. He and John Rowe, his predecessor as CEO, also encouraged employees to leverage the firm's data to develop new products and services for customers. One such service, the Aetna Navigator—which provides online medical advice for individuals—won accolades for being the best of its kind.v

Leading an IT-Savvy Firm

Becoming IT savvy requires a clear vision, strong leadership, and a significant change management effort. It can be difficult to distinguish IT-savvy firms' use of IT from their outstanding business management. Indeed, a characteristic of IT-savvy firms is that IT is at the heart of highly effective management. IT is the platform and scaffolding for delivering world-class operations and strategically focused management decision making. Fewer than one-third of the firms we've studied are IT savvy, but our research suggests that IT savvy will become a prerequisite for doing business in the digital economy. It's time to get started.

i. The material on Aetna in this chapter is primarily drawn from Cyrus F. Gibson, “Turnaround at Aetna: The IT Factor,” working paper 362, MIT Sloan CISR 2006.
ii. From “Leading Change: A Conversation with Ron Williams,” MIT Sloan School of Management's Dean's Innovative Leader Series on October 9, 2008.
iii. See Peter Weill and Sinan Aral, “Generating Premium Returns on Your IT Investments,” Sloan Management Review 47, no. 2 (2006): 39; and Peter Weill et al., “Becoming More IT Savvy and Why It Matters,” research briefing vol. VII, no. 1D, MIT Sloan CISR 2007.
iv. MIT Sloan CISR Survey of 1,508 firms in 60 countries in late 2007.
v. “How good is your online nurse?” BusinessWeek Online, February 20, 2006.