IT investments can play a critical role in raising business productivity. But a study of 100 manufacturing companies in France, Germany, the United Kingdom, and the United States found that IT investments have little impact unless they are accompanied by first-rate management practices, which, by contrast, can boost productivity on their own. We rated companies on how well they used three important management practices: lean manufacturing, which cuts waste in the production process; performance management, which sets clear goals and rewards employees who reach them; and talent management, which attracts and develops high-caliber people. The companies that had the highest marks in these areas became more productive, with or without higher spending on IT. Those that combined good management practices with IT investments did best of all.
For more on the relationship among productivity, management practices, and information technology, read "When IT lifts productivity." (Premium)
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