Facing adverse market conditions, escalating production costs, a deteriorating subscription base, and decreasing advertising revenues, a print-media company wanted to develop a quick cost-reduction plan. But the company also wanted to preserve capacity for growth over the medium and long term. It asked McKinsey to help it make IT operations more efficient and effective.
McKinsey created a joint team for the project, bringing consultants with industry experience from our Media Practice together with technology specialists from our Business Technology Practice. The team’s initial analyses revealed that rather than cutting costs the client had an opportunity to add a new dimension to the activities of the IT department. This would enable the department to sell services outside of the parent company.
After persuading client executives of the concept’s value, the scope of the consulting project was redefined. The objective became to reposition IT systems to have a strategic position within the company and create opportunities for new revenue streams. The engagement had three stages.
First, the McKinsey team worked closely with the client to analyze the current state of IT systems: alignment with company strategy, financing, organization, infrastructure, applications portfolio, etc.
Second, the team developed recommendations for changes that would be required to support the repositioning. The organization and its processes were rethought to enable the company to fully exploit the potential of its IT systems. Instead of acting as a support function, IT had to become a strategic imperative.
The third phase was implementation, with a focus on managing the human dimensions of change. Client teams were trained and guided to envision themselves delivering concrete solutions to attain the agreed objective. Project-management skills were built to support lasting change.
By the end of the project, the McKinsey team had helped the client to develop an agreed-upon, well-defined objective, a means of realizing it, and momentum which produced tangible results within the first few months. For the client company’s staff, the need for cost cutting was avoided and their status in the organization was enhanced.