The previous three parts of this series have discussed the advantages of mapping an organization to the characteristics that represent the changes made over time as progress is made towards achieving the implementation of best known practices. This, the final installment in the series, is designed to provoke thought and discussion.
Through ongoing research IDC is in the process of building, proving and disproving theories about what an organization might look like as it moves through change processes that are imposed as a result of the shifting business environment. An ongoing dialogue with IT and non-IT executives is critical to this analytical process. It is our plan to ask readers to participate in that dialogue directly through a survey distributed as part of a future issue of CIO Canada magazine. When that time comes I hope you will be enthusiastic about sharing your views with us.
Compelling Business Issues
Entry into the 21st century could not have been more volatile – dot-com meltdown, established infrastructure providers losing much of their market value, increasing use of the “R” word, established corporations suffering losses. So what is the CIO or non-IT executive to do? Burying your head in the sand is not a good answer. Aggressive, but managed and planned change is in order. However, it is no longer wise to make changes based purely on instinct and gut feel. Understanding the potential implications of the change has never before been so important. Only with this understanding can you begin to determine whether or not the change is appropriate at a given point in time.
First of all it is important to recognize what the most compelling business issues are. IDC Canada has identified four:
eBusiness Resilience – Climbing the Mountain, Avoiding the Abyss
The need to capitalize on the opportunities presented by a continuously evolving global economy and unparalleled technology is compelling. There are many choices, but only so many appropriate decisions. There is much to be learned about the perils and pitfalls of adopting a new business model. Are the business drivers different in 2001 than they were in 2000? Has the definition and scope of eBusiness changed? Why is this important?
Understanding where we are today is a necessary foundation for deciding where we can reasonably expect to be in the future, as well as how quickly we can expect to arrive at the desired destination. IDC’s eBusiness Resilience Maturity Model provides much needed insight into the four stages of growth and progress through which an organization can expect to pass during its journey towards best known practices in eBusiness. Understanding what these stages are and what the potential pitfalls might be can make a significant contribution to achieving success and ensuring survival.
Customer Centricity – ‘eXecuting’ Customer
Customers are key to growth, and managing the customer relationship is fundamental to success in any business. It is important to do whatever is required to make it easy for customers to do business with us and to prove that we really want to please them. This involves getting to know our customers and using that knowledge to develop and sustain a highly satisfactory lifetime relationship with each of them. This value proposition is at the heart of our need to rethink our processes and the structures that underpin them.
Customer centricity is the most important principle of effectively developing and sustaining relationships with customers. It is a multi-step endeavour involving people, processes and technologies that span the entire organization and a complex cycle of customer-focused ac-tivities. Developing customer centricity is definitely a challenge, but it must be addressed.
Through exposure to the progressive steps involved in placing the customer at the heart of the business model we will be able to compare our practices with the best known practices of today. The Customer Centricity Maturity Model will explore the realities of placing the customer at the center of the organization’s processes.
The IT/Business Partnership: Two Sides of Value Creation
Technology is fundamental to conducting business today; core business processes are so highly automated that information technology systems actually contain and perform them. The boundaries between IT and non-IT business units continue to blur as the extended enterprise becomes more common. Despite the range of technical solutions and systems available to executives, the real challenge is finding the right set of technology strategies and resources to achieve these new techno-business objectives of the organization. It is a challenge that requires the insights of a technology expert and the instincts of a smart business strategist.
IDC’s recent research results identified a dramatic change in the role of the IT organization from a strict service and support function to a full strategic business partner with the business of the organization. It has never been more important for IT and non-IT executives to be in partnership with each other, aggressively pursuing the organizational discipline and developing the strategic foresight to become the most competitive business in the market.
What is needed is radical reconstruction of the rules that govern the IT and non-IT relationship to meet the new challenges of competition. IDC’s IT/Business Partnership Maturity Model outlines the stages involved in this complex transformation of roles and provides an exceptional foundation for planning and managing all aspects of this change.
Metrics and Measures – Understanding Technology’s Real Contribution
Conventional wisdom has dictated the use of the same corporate valuation metrics for many years. But, as the economy continues to evolve and is increasingly defined by intangibles, it is difficult to rely entirely on traditional financial tools to measure progress. The key investment is now in the information needed to support customers – acquiring and retaining them. These initiatives are knowledge-based and supported by large capital expenditures on technology.
All of us must have the ability to drive sustained corporate value through any one or all of our key initiatives and also be willing and able to measure this success. This requires commitment across all functions and business units, and acceptance of a common set of metrics and valuation processes. Investment in IT continues to increase and the need to better understand its contribution to overall corporate financial health is critical. Because technology and business process are entwined, it is unrealistic to separate measurement of investment and return associated with them. New ways of measuring financial performance are needed if we are to realistically monitor our progress.
IDC’s Metrics Migration Maturity Model can be used as a guideline for assessing the strength and durability of your existing ROI strategies and measurement systems. The fourth generation of the multi-stage model represents current best thinking and best known practices in financial metrics and measurement. Understanding the pros and cons of other, less advanced generational stages will help us to recognize where and how we can more effectively apply metrics to assess competitive strength.
Looking forward, IDC’s research clearly indicates that business executives (IT and non-IT) expect big things from technology. What must be done to ensure their expectations are satisfied is less clear. There is a deep-seated commitment to the need for change, but understanding why it should occur and when it should happen is relatively obscure. Also, appreciation for what might happen if the change does or does not occur is pretty vague.
IDC developed the Maturity Models to help executives understand what is likely to happen as change occurs and also to recognize the implications of making change, or conversely not making change. Regardless of what industry you are in and the size of your organization, you are currently faced with defining what could be the decade’s most critical strategies. Why do this in a vacuum?
The four compelling business issues outlined above (along with their related Maturity Models) are the focus of eXecuting in the Evolving Economy, an executive forum co-sponsored by IDC and LTI (publisher of CIO Canada) in Toronto June 6 and 7, 2001.
Jan Duffy is Group Vice President, Solutions Research, IDC Canada. Author of the recently published “Harvesting Experience-Reaping the Benefits of Knowledge”, she can be reached at [email protected]. Information about eXecuting in the Evolving Economy is available at www.idc.ca.