Archive for the ‘Innovation’ Category

IT Expenditure – Profit Centre Focus   Leave a comment

Why can’t IT be seen as a profit generator? Why is it that the default position when it comes to IT expenditure is efficiency and not investment?

For me the key here is that IT should not be seen as an amorphous whole. That its function is not the same across the entire organisation. An analogy. For example, don’t we view sales people differently to accounts staff? Isn’t the output from the operational people different from the executive? For if we have people in different roles with different purposes, can’t we have IT in different roles with different purposes?

Aren’t we aiming for effectiveness and efficiency from our operational staff, and income and opportunity growth from our sales staff?

Why can’t we view our information systems the same way? That is, that our information systems are dual use? That in different contexts in the organisation, IT should be viewed and used in a manner relevant to that context.

So, if IT can be viewed as a profit generator – what should our frame of reference be for making decisions? If technology is there to produce income – how do we decide what investments should be made?

If TCO is the measure for operational efficiency, isn’t ROI the measure for income generation?

And yes, there are other formulae for guiding investment decisions.

So, viewing IT from a profit centre focus requires an understanding of the range of potential gains from the investment. These include tangible and intangible factors. It requires a judgement about the additional cash flows from the range of projects under consideration. It requires an understanding of the opportunity costs of doing one project and not another. It requires alignment between the business goals and IT strategy.

For me, IT can definitely assist in the generation of intellectual capital. It can improve income generation potential.

Think about this – if the organisation you work for, whether for-profit or not-for-profit, is operating in the information space – doesn’t it stand to reason that information technology is fundamental to the creation of value?

 

 
For more, visit Dellium Advisory, follow on Twitter, connect using LinkedIn, or review my strategy and futures-centric blog.

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Posted September 22, 2014 by terop in Business Strategy, ICT Strategy, Innovation

IT for Strategic Advantage   Leave a comment

Given that strategic advantage is gained through the management of information, how are you managing your information?

And where is your information? Is it locked up databases only belonging to unique applications? Is it hidden in those hundreds, or perhaps thousands, of files of unstructured data?

And yes, all that structured and unstructured data is secure. Its backed up, its well managed from an operational perspective. But is it well managed from a strategic perspective? The auditors can come past and give you a clean bill of health from their perspective, but can the forward thinkers come past and say “wow!” Will these strategic thinkers come past and tell you will certainly maintain the health of your organisation through your perceptive management of information.

For IT is a fundamental aspect of enabling staff to be flexible and to be forward thinking. Yes, IT is there to obtain operational efficiency. But its also available to support, even lead, the strategic positioning of your company.

And the importance of strategic positioning? Well, have you thought about what is happening around you? Have you thought about the jetstream of business today? Reflect on the word change. On the improvements we see daily in all manner of areas? On the increasing effectiveness of all manner of new services. Doesn’t life seem to changing at an increasing rate? What about your markets, your customers, aren’t they changing too?

So, how do you keep up? Do you drill into your data to look for historical insight? Do you gather information from outside your organisation to assist in the forecasting of what path to follow?

You can effectively use information technology to improve your strategic positioning.

For more, visit Dellium Advisory, follow on Twitter, connect using LinkedIn, or review my strategy and futures-centric blog.

Posted August 29, 2014 by terop in Business Strategy, ICT Strategy, Innovation

IT Bias Improves Innovation   Leave a comment

Research indicates that investment in IT leads to improved innovation outcomes. For the purposes of this short discussion, there are three components of innovation:

  1. the intensity of research & development
  2. acknowledged Intellectual Property of the firm (patents)
  3. the value of intangible assets

Further, it has been found that four of the top five reasons for investment in information technology among Fortune 500 companies are related to:

  • intangible assets
  • innovation activities
  • exploration activities

Thus IT is associated with the finding new areas of growth, for exploring perhaps unchartered territory. IT is central to innovation. A focus on IT improves the value of the firm by expanding the intangible asset base.

So, are you using information technology to:

  • develop new products?
  • analyse current and new markets”
  • expand your theoretical knowledge about your products and services?
  • understand how you can do what you do in a better way?

For more, visit Dellium Advisory, follow on Twitter, connect using LinkedIn, or review my strategy and futures-centric blog.

Posted August 18, 2014 by terop in Futures, ICT Strategy, Innovation

Using IT for Competitive Advantage   Leave a comment

They key question is what is your organisation’s core competency? And from that, are you using IT to improve that core competency?

There is a growing body of knowledge that lends weight to the argument that investment in the right mix of information systems improves economic performance. Specifically, getting this portfolio right has the following results:

  • improvement in the bargaining power with suppliers and customers
  • reduction in operating costs
  • lowering of processing costs
  • enhancing product differentiation
  • increasing barriers to entry

But, the focus of those making decisions should not be solely on the current tense. Benefits do flow on into the future.

Necessarily, these IT investment decisions are made with respect to the business vision. Is the vision to be a low cost producer? Is it to be an exporter of quality goods? Is it to be highly responsive to customer requirements? Are you seen as an innovative and cutting edge?

The answers to these questions will lead to the decisions that need to be made regarding IT spend. That is, how will IT be best used for your competitive advantage. For example:

  1. do your portfolio of information systems improve the efficiency of information flow?
  2. are you capturing how well you know your customers?
  3. are you using this captured customer information to improve your product offering (lower cost or differentiation)?
  4. do you know the history of all of your input costs, and do you analyse their trends?
  5. what is your attitude toward innovation, is information technology assisting in innovation management?

Information Technology can have such a positive influence on your organisation. Are you taking advantage of all that is on offer?

 
For more, visit Dellium Advisory, follow on Twitter, connect using LinkedIn, or review my strategy and futures-centric blog.

Posted August 15, 2014 by terop in ICT Strategy, Innovation, Technologies

Justifying IT Investments   1 comment

What is often the case in decision making regarding IT investments is a focus on the cost of the investment to the exclusion of the benefits.

We focus on the licensing fees, the project management costs, the interruptions the changes will cause, and so on. But we don’t fairly assess the benefits. We don’t attempt to quantify what the positive outcomes will be. For after all, it is about wielding technology for the improvement of information flows. It is about getting better systems in dealing with the organisation’s information.

Seen in this light, IT projects should be measured with respect to the business process improvements they will make.

Alshawi, Irani and Baldwin in a 2003 study highlighted the fact that IT investment is about improvements to productivity improvement and competitive advantage. That any organisational and process gains come from the use of information technology, not from the information technology itself. And that these advances and enhancements are quantifiable through the following process:

  1. identification of benefits
  2. the changes needed to realise the benefits
  3. execution of these identified changes
  4. evaluation of the results of these changes
  5. discovery of further benefits

This benefits appraisal and management process speaks to the need for information technology projects to be aligned to the business vision to realise the full impact that these systems can bring. By including quantifications of investment outcomes using these terms, improvements in the robustness of the justifications for these IT investment decisions will ensue.

 

For more, visit Dellium Advisory, follow on Twitter, connect using LinkedIn, or review my strategy and futures-centric blog.

Posted August 11, 2014 by terop in Architecture, ICT Strategy, Innovation

Technology Hype or Trend?   Leave a comment

In the world of technology there are many fascinating developments. Think about Google Glass, 3D printing, driverless cars and graphene.

But what causes these developments to move out of hype and inflated expectations into something disruptive. What causes a potential disruption to become an actual disruption?

Think about cloud computing. Several years ago it was pie in the sky. That there was the possibility that enterprises could offload all of their computing infrastructure to a third party. That organisations of all sizes could stick to their knitting and not worry about their IT.

And what happened? Delivery costs came down, governance questions were answered satisfactorily, provider choice blossomed. To the point that that hype has become a trend to the point that the technology is becoming embedded into how organizations run their IT.

Now, think about Bitcoin. About crypto-currency. Its all the hype now. There’s some inflated expectations that it will replace our standard commercial and retail transactions. That in the wake of recent financial matters that this industry is ripe for disruption.

So, what will happen? Well, the stages are:

  1. the framing of technology and its uses will iteratively improve over time
  2. some key people, institutions and organisations will take the lead and become a change agent with this technology
  3. issues around how the technology will be used in the mainstream will be resolved as it becomes more widespread

Thus, with respect to Bitcoin, watch to see if there are some key backers of the technology. It’ll tell you that this financial instrument is headed to mainstream.

For more, visit Dellium Advisory, follow on Twitter, connect using LinkedIn, or review my strategy and futures-centric blog.

Posted July 22, 2014 by terop in Futures, ICT Strategy, Innovation, Technologies

A Mobile-first & Cloud-first era   Leave a comment

As a long time tech company watcher – say Google, IBM, Microsoft, and so on – its interesting to observe the changes in their emphases. With what they see as their competitive advantage in the years ahead.

Take Microsoft’s recent shift from “a devices and services company” to “a productivity and platform company for the mobile-first & cloud-first world”.

That implies that they see an inexorable shift to mobile computing. They see the end of the traditional server room.

But what are the implications for those that use computing and those that supply computing?

  1. location independent interaction with organisations will be assumed
  2. convenience and responsiveness will be the only acceptable customer service experience
  3. unlimited computing power will be available to organisations
  4. the ability to use information will be critical
  5. the security of the organization’s information will be critical
  6. internal ICT users will expect the same mobile-first & cloud-first experience as customers do
  7. the ICT portfolio will be skewed toward SaaS
  8. a reduction in the headcount of internal ICT support staff

The world is changing, and technology leaders like Microsoft are changing in order to keep up with the times. In order to survive and thrive.

Are you?

For more, visit Dellium Advisory, follow on Twitter, connect using LinkedIn, or review my IT-centric blog.