The End of Business as Usual
Traditional business is at the dawn of a new era. A global economic shift, the digitisation of our society and the rise of the internet have dramatically changed the playbook for business-as-usual.
Traditional business is at the dawn of a new era. A global economic shift, the digitisation of our society and the rise of the internet have dramatically changed the playbook for business-as-usual.
Companies with a Darwinian approach to doing business will soon be outpaced by the competition while new technologies, globalisation and changing customer behaviour are reshaping business outcomes. Managers are expected to come up with a new strategic logic while simultaneously improving their organisation’s strategic flexibility to respond to this continuously changing environment. The capability to align management processes, intangible and tangible assets, operations and product/service offerings with this new strategic logic becomes the key to unlock the company’s growth potential. Only a few companies are capable of tapping into the unexploited potential of Information Technology as a way to create growth. These IT -savvy companies have outperformed their competitors by double digits while keeping their IT expenditure below industry average. IT-savvy companies have a management that embraces IT as an integral part of running their business. Managers have built up the distinctive capability of identifying IT investments with a revenue-growth potential thus leveraging Information Technology as a resource to create a competitive advantage.
Remaining Competitive in the Connected Society
In today’s economy, the competitive advantage of an organisation is largely determined by the way it keeps up with a changing environment. Enterprises, big and small have to remain boffo in an (economic) climate where globalisation, increasingly demanding customers, credit crunches and aging workforces rule the agenda.
To remain successful, companies may have to reinvent themselves to keep up with new entrants that are also claiming their share of the market.
The rise of technology has been a major catalyst of change over the last couple of decades. With the growing importance of Information Technology, especially the internet, a whole new industry was established and the first internet-based business models were born. All these organisations have used Information Technology to create a first mover advantage and shape new markets.
With the emergence of IS/IT in business, businesses everywhere are undergoing rapid and significant change, and across a wide range of business markets, IS/IT is obviously rising above its traditional ‘back office’ role and is evolving towards a ‘strategic’ role with the potential not only to support chosen business strategies, but also to shape new business strategies. (Luftman et al. 1993; Henderson and Venkatraman, 1993).The Pervasiveness of Technology
Information Technology is concerned with the study, design, development, implementation, support and management of any computer based information systems (Information Technology Association of America). IS stands for Information Systems and covers the hardware, software and methods used for the processing, storage and exchange of data and information. IT (also known as ICT where the C stands for Communication) is a generic term and encompasses many areas from data management, networking, engineering computer hardware, software design, database design and management and administration of systems. In this digitalised context, the pervasiveness of Information Technology gave rise to a new post-industrial society: the information society - a society where [...]
information is used as an economic resource, the community harnesses/exploits it, and behind it all an industry develops which produces the necessary information (Nick Moore, 1993)In the networked society, data is the new oil and as a result, our environment has become increasingly information-intensive. This does not only affect the global multinationals, it also affects the smaller and medium-sized companies. They both have to deal with entrepreneurial, engineering and administrative problems in order to remain competitive in an increasingly networked society. In dealing with this fast-changing environment, the management has to take decisions, invest in technology, attract talented people, ensure that processes run smoothly and meet financial targets imposed by their shareholders.
Survival means making Tough Choices
Every firm, big or small has to make tough choices, deploy resources and plan investments in order to remain competitive and with the pervasiveness of corporations will be also be faced with IT-related investment questions. Information Technology comes with a promise of automating processes in domains such as production, logistics, sales or customer service. These (operational) processes can be optimised and made more efficient through clever investments in the management and evolution of core IT systems. Manual tasks are automated thus reducing the need for human interventions. Workflows can be optimised and automated to reduce production lead times. In this perspective, IT becomes a key enabler in effectively managing information-intensive and data-driven processes.
Adversely, ineffective IT systems can also create bottlenecks in the process and dent the firm’s productivity. For example, an organisation that wants to improve the production planning but runs with an outdated ERP system, is facing a glitch in the process. At this point, an ineffective IT system creates a bottleneck in the production domain which leads to suboptimal performance and potential revenue loss for the firm.
The digital era is here to stay and we are only half way: Social Business, Social CRM, Bring Your Own Device and Big Data are business trends that will completely reshape Enterprise IT and the way companies will be doing business in a not so far future. The key to survival? Incorporate digital in your corporate DNA!