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22 McKinsey, BTO

Session 22: Development Areas, Regional-focus, BTO & Partner-style cases

We like BTO cases because it is a great skill of a candidate to extract the strategy issues from seemingly mundane information technology problems. What these cases show is that the outcome of the analyses is completely dependent on the framework used. A framework which only evaluates operating issues will not address the strategy elements and vice versa.

We teach candidates to apply a very elegant thought-process to identify which operational issues are essential to support the information technology strategy, and which parts of the information technology strategy are essential to support the corporate strategy. Those three areas sit at the core of BTO cases and are ignored by most candidates.

The way to tackle IT issues is to understand that IT problems involve a disaggregated set of data points across the organization over which all parts of the organization have control. It is not like finance where a key set of known personnel control invoices or payments with strict checks and balances in place. Information technology and the data collected cannot be controlled but needs to be governed.

The single largest reason candidates fail BTO cases is they ignore the governance requirements in cases and focus on technique issues.

Therefore, in addressing IT problems, governance becomes more important, yet is generally poorly defined and usually ignored by candidates who are accustomed to discussing systems and processes.

Let’s use a simple example to explain governance issues. Only a draconian company will force employees to use smartphones for business use. Enforcing this rule is costly, unlikely to generate results, poor use of IT skills and creates an atmosphere of a company watching over employees. A far better system is to “pull” incentives where employees are enticed to use their phones for value adding activities versus punished for non-value adding activity.

To accomplish, the right governance system must be in placed to encourage this behaviour versus having rigid rules and responsibilities mandated for every task. It is behaviour driven.

Our approach caters for the fact that IT problems must be addressed simultaneously from a systems, strategy, governance, processes and organizational design perspective.

In the session descriptions which follow, we are using one description for 4 different candidates. Yet candidates do not perform the same, and while the descriptions are mostly accurate, there will be some differences as a few cases are brought forward, others moved back or candidates fail to prepare adequately. While these differences are minor, they sometimes occur.

Cases questions taught in the session:

Felix’s cases recorded in the session; Talk me through a decision you made that your team did not agree with, and how you managed this process (Fit Question), Talk me through a trend in IT and what it would mean for a European CEO, Brainstorm why IT projects go over budget and scope, How would you help Germany’s largest transmission company change its IT strategy, Estimate how much Siemens IT budget would be per annum & McKinsey BTO function data interpretation.

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