The MIT CISR Value Framework:
Commitments and the Practices that Support Them
Anne Quaadgras, Research Scientist
Peter Weill, Chairman & Senior Research Scientist
Jeanne Ross, Director & Principal Research Scientist
MIT Center for Information Systems Research
Top-performing firms make four commitments that help them achieve
higher impact from their digitization efforts. But to what do they commit
and how much difference do these commitments make? And when imple-
menting these commitments, which management practices work best? In
this second briefing in a series on the MIT CISR Value Framework, we
answer these questions with new survey results and examples from UPS,
BMW, Allstate, Tetra Pak, and ExxonMobil.
Four Commitments Maximize the Impact from Digitization
In a digital economy, firms need to make four commitments around digiti-
zation: strategic choice making, distinctive digitization, working smarter, and
actionable assessment (see figure 1).1 Across all industries, the four com-
mitments work together to help firms maximize the opportunities of
digitization.
In our survey of 430 firms,2 we found that the more effectively firms make
these four commit-
ments, the higher the
digitization impact.
Digitization impact is
the contribution IT
makes to three perfor-
mance areas from the
perspective of senior
management: business
growth, asset utilization, and busi-
ness agility. And digitization impact pays off:
Firms scoring in the top quartile on digitization impact had a 5% higher
return on equity than the average firm, and 15% higher than the bottom
quartile in their industry.
1 P.Weill, J. Ross, and A. Quaadgras, ―Achieving Superior Value from Digitiza-
tion: The MIT CISR Value Framework (Updated March 2011),‖ MIT CISR Re-
search Briefing, Vol. X, No. 8, August 2010.
2 From an analysis of 472 IT and non-IT respondents in 430 firms with 500 or more
employees or revenues more than $10M. Regression analysis shows all commit-
ments significantly affect digitization impact, controlling for industry and firm size.
All four commitments impact performance, but
strategic choice making is the place to start. Without
choosing how to operate in the digital world
(e.g., which data must be shared across the firm),
firms can’t effectively exploit digitization. Mak-
ing strategic choices establishes clear priorities
for both IT investment and business manage-
ment focus. For example, UPS has committed to
a highly standardized end-to-end package deliv-
ery process globally, with a single package
database at its core.3 UPS has sustained this
commitment over decades with great results.
Strategic choice making means not only that a
firm is committing to a particular direction, but
also that it is choosing not to pursue some
potentially viable alternatives.
But a commitment to specific strategic choices is
not all it takes. Strategic choices need to be
implemented via commitments to distinctive
digitization, working smarter, and actionable assessment.
It’s these three commitments that actually create
measurable digitization impact. These com-
mitments are coordinated and given focus by the
strategic choices that help avoid the ―IT
spaghetti‖ trap many firms encounter. IT spa-
ghetti is created by a myriad of locally important
IT projects that add some value but also add to
overall complexity and cost, and work against
providing a great end-to-end customer expe-
rience and business agility.
A commitment to distinctive digitization addres-
ses the question: What digital capabilities will we
create and reuse? Firms with higher digitization
impact have a greater commitment to building a
common flexible IT infrastructure, enabling
3 J.
Ross, W. Draper, P. Kang, S. Schuler, O. Gozum,
and J. Tolle, ―United Parcel Service: Business Trans-
formation through Information Technology,‖ MIT
CISR Working Paper No. 331, September 2002.
more common digitized processes and data assets essential to enterprise
information sharing. For example, in implementing its commitment to
build a standardized global infrastructure, BMW cut its infrastructure costs
by 25% (over $100mm) between 2006 and 2008, making that money
available for digital innovation.4 In implementing a single package database,
UPS standardized all of its package data, enabling new value-adding services
over time, such as customer package tracking on the web. The strategic
choices—to have a single package database at UPS, or a global
infrastructure at BMW—are not up for debate within each project; rather,
digitization decisions advance these choices about how to operate.
Working smarter is a commitment to helping employees contribute more
directly to business success by automating repetitive processes and cleverly
using information from digitized platforms. There were four approaches to
working smarter that statistically had a big impact: creating and revising
business rules based on analytics; automating repetitive processes; inno-
vating via strategic experiments to test and learn; and providing business
partners with timely information.
Allstate is working smarter in several ways.5 Now that their Next Gen
platform is used to process 90% of claims, they are building fine-grained
business rules, based on
past claims data, to pro-
cess some simple claims
in one day rather than the
typical 40 days. New busi-
ness rules also allow more
complex claims to be
automatically routed to
the most appropriate ex-
pert for speedy resolution. Allstate is
increasingly automating simple, repetitive pro-
cesses such as ensuring that documentation is complete. All these efforts to
work smarter increase customer satisfaction and lower processing costs.
Actionable assessment is a commitment to a learning cycle of measuring
progress toward a small set of goals, making adjustments, and measuring
progress again. Firms more committed to actionable assessment had higher
digitization impact. For example, one large retailer measures employee
engagement and customer satisfaction at least monthly at each of its
thousands of stores via simple online surveys. Store managers have access
to the reports, along with drilldowns, training, and coaching on how to
improve these outcomes. With data back to 2002, the company found
employee engagement is tightly linked to customer satisfaction, and custo-
mer satisfaction directly impacts store financial performance. Managers use
the metrics to guide operating improvements, measure the effects, make
adjustments, and measure again.
4 A. Quaadgras and P. Weill, ―Globalizing IT Operations at BMW: Transparency
and People,‖ MIT CISR Research Briefing, Vol. IX, No. 11, November 2009.
5 J. Ross and A. Quaadgras, ―Working Smarter: The Next Change Management
Challenge,‖ MIT Sloan CISR Research Briefing, Vol. XI, No. 1, January 2011.
How Firms Support the Four Commitments
Firms rely on management practices to imple-
ment their commitments. Four digital disci-
plines—communication, IT unit profession-
alization, accountability, and improvement—
support the commitments (see the outer ring in
figure 1). Statistically, nine management practices
within those disciplines are associated with
higher levels of commitment.6
Transparent communication about risks and
opportunities enables decision makers to make
tradeoffs explicit. Two specific practices charac-
terize effective communication: validated busi-
ness cases with costs and short- and long-term
benefits, and fostering an environment where
employees can openly work together on risks
without politics or fear of retribution. BMW has
created templates for business cases that include
providing subjective evidence of business value
and risks. The top business executives and the
CIO on the IT Steering Committee make final
project decisions with a clear understanding of
the potential impact on BMW.
Professionalizing the IT unit improves both its
capabilities and its credibility, which together are
essential to enabling increasingly digital business
products and processes. Two management
practices common among professional IT units
are adopting a finite set of published, regularly
updated technology standards, and imple-
menting mechanisms that help IT staff focus on
business outcomes. BMW formed cross-regional
working groups to architect practical standards
by negotiating workable compromises. In this
process, they defined four application platforms
for all new development (.NET, SAP, open
source, and, least preferred, mainframe). Having
these standards—and requiring that exceptions
are explicitly approved—helps them think
through relative benefits and costs of changes,
and make coherent choices to support their
commitments.
Managers in successful enterprises often point to
accountability as a critical success factor in gener-
ating business value from IT. Accountability
6 In the regression analysis of 472 respondents, all of
these practices significantly support the extent of com-
mitment (p< .05), controlling for industry and firm size.
ensures that someone owns a project, business
process, type of data or program, and is respon-
sible for outcomes consistent with the commit-
ments. Accountability assignments are important
in at least three areas: process owners for enter-
prise business processes, business ownership of
enterprise data, and individual or group account-
ability for creating value from IT investments.
Tetra Pak, the €10B ($13B) global food
packaging supplier, is organized around seven
global business processes (e.g., Customer
Management, whose goal is to ―grow sales and
strengthen customer relationships‖). Each
process has a top executive business owner, and
Tetra Pak is now creating owners for key
master data. Both of these practices support
Tetra Pak’s commitments by making clear who
is responsible for achieving value from digitized
processes and related data.
Figure 1: The MIT CISR Value Framework with Practices that Support Making and Keeping Commitments
• Validated business cases that
elaborate both short- and long-term
costs and benefits
• Employees who are
encouraged to discuss and
work together on risks
Working
Smarter
How will our people
contribute to
business
success?
• Accountable owners for all
enterprise business processes
• Business ownership of key data
• Explicit accountability for creating
value from IT investments
Formalized improvement processes embed past learning into future projects,
thus ensuring continuous improvement. Two practices capture improvement
opportunities: a business process architecture to support process design and
optimization, and a standards exception process. Business architecture speci-
fies requirements for integration and standardization, thus clarifying appli-
cation requirements. Exceptions to standards help firms learn which stan-
dards are insufficient or out-of-date as innovators introduce new capabilities.
ExxonMobil has created an innovation team that is part of its Data,
Integration, Architecture, and Learning unit. This team scans for new
technologies and conducts experiments to assess their value and fit into
the business architecture. While only 10–15% of the technologies make it
into incubation, the process lets them efficiently learn what works, and
then adopt those winning technologies quickly and widely.
The MIT CISR Value Framework is a roadmap for how to thrive in a digital
economy. We suggest you share the framework with your colleagues and
ask: How good are we at making and keeping the four commitments? How
effective are we at the nine management practices top performers use to get
industry-leading impact from digitization? And finally, what can we do today
to improve our ability to commit and implement these nine practices?
• A finite set of technology
standards that are updated as
Strategic appropriate
Choice Making • Mechanisms that help IT staff
How will we focus on business outcomes
operate in a digital
world?
Actionable
Assessment
Agility How will we
keep on track?
Distinctive
Digitization
What digital • A business process architecture
capabilities will we that guides application design
create and reuse?
• A standards exception process
that supports innovation efforts
 About the MIT Sloan Center for Information Systems Research 
 
 MIT SLOAN CISR MISSION  CISR RESEARCH PATRONS 
MIT  CISR,  founded  in  1974,  has  a  strong  track  record  of  The Boston Consulting Group, Inc. 
delivering  practical,  empirical  research  findings  on  how  Diamond Advisory Services 
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inates  this  research  via  electronic  research  briefings,  Gartner  
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Microsoft Corporation 
to the following topics: 
SAP Americas 
 Business Transformation and Change Management  Tata Consultancy Services Limited 
 Digital Business Models 
 Digitized Platforms and Business Agility  CISR SPONSORS 
 Enterprise Architecture  A.P. Moller Maersk (Denmark) Fidelity Investments
 Information Management and Use  AECOM  FOXTEL (Australia) 
Aetna Inc.  Grupo Santander Brasil 
 IT Governance 
Allstate Insurance Co.   Holcim Brasil S.A. 
 IT Innovation  AMP Services Ltd. (Australia)  Intel Corporation 
 IT Portfolios and IT Savvy  ANZ Banking Group (Australia)  International Finance Corp. 
 IT‐Related Risk Management  Australia Post  Itaú – Unibanco S.A. (Brazil) 
 IT Unit Design and Leadership  Australian Dept. of Immigration  JM Family Enterprises 
& Citizenship  Johnson & Johnson 
In  July  of 2008,  Jeanne W. Ross  succeeded  Peter Weill as  Australian Taxation Office  Leighton Holdings Ltd. 
the director of CISR. Peter Weill became chairman of CISR,  Banco Bradesco S.A. (Brazil)   (Australia) 
with a focus on globalizing MIT CISR research and delivery.  Banco do Brasil S.A.  Level 3 Communications 
Drs. Anne Quaadgras, Peter Reynolds, George Westerman  Bank of America  Liberty Mutual Group 
and Stephanie L. Woerner are full time CISR research sci‐ BBVA (Spain)  Marathon Oil Corp. 
entists. MIT CISR is co‐located with MIT Sloan’s Center for  Biogen Idec  MetLife 
Digital  Business  and  Center  for  Collective  Intelligence  to  Blue Cross Blue Shield   Nomura Research  
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BT Group (U.K.)  PepsiCo International 
many contributions to our work.    
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