Share Prices & IT

As share prices and the stock market head south, and as companies hunker down to survive the down cycle, there may be few that realise the impact that corporate IT can have on share price and survival.

In the short term, financial markets are largely driven by emotion. But in the medium to long term they are driven by fundamentals such as profitability & growth, which is where IT comes in.

Take Standard Life, for example, the Edinburgh based life & pensions company.

Last year, in 2007, Operating profit shot up by 71% and new business grew by 31%, after the company started to focus seriously (a couple of years ago), on achieving the promise & potential in IT.

Another example is British Airways (BA) whose return to financial health is largely due to its corporate IT, and particularly its customer-reaching e-ticketing and e-check-in sysem

But Standard Life and BA are not isolated cases. There are other examples of business organisations ramping up performance through IT. MIT's Centre for Information Systems Research, for example, has a number of studies showing the connection between IT performance and business performance.

The main point is this:
If the promise & potential of IT were achieved in business organisations it would (ceteris paribus), have a significant impact on satisfacion, value and purpose, with this impact being shown @ the bottom line in profitability, growth, and shareholder returns.

In the case of Standard life, the company turnaround came largely through the following.

1. A change of mental models, as for example in the 'traditional' separation between Business on the one hand, and IT on the other. Everyone started speaking the same language.
2. Close collaboration & synergy between IT specialists and Business client/users. In fact IT people got out into the business areas and worked alongside their client/users, with the third party in the equation being the customer - what might be referred to as Synergy Circles.
3. Business process re-design (BPR), which has a lot to do with total quality management (TQM), to squeeze out the parts that add cost and take time, and optimise the parts that add customer value and cut time.
4. Lean/agile development, which is the IT version of BPR, re-designing the development & support processes so as to be lean & mean and rapidly responsive.
5. A flexible/integrated IT architecture, which enabled rapid response to business needs.

But the secret ingredient as it were, in all of this, in any organisation that wishes to fulfil the promise and potential of IT, is senior management if not Board active involvement & support.

After all, if IT really does have the promise and potential to significantly impact profitability and growth, then the need for senior management if not Board active involvement & support, is evident.

Do you have experience with IT making a difference
to business performanc?
What, in your view, were the key things that made it happen?

Change & Rapid Response

Martin Fowler is one of those rare people who combine deep knowledge of information technology with the ability to write lucid articles about Business with IT.

His article The New Methodology, posted on his web site, which is about Agile Computing, is for anyone seeking an easy read on new ways of responding rapidly to changing business needs.

In today's rapidly changing and Black Swan environment, a Critical Success Factor (CSF), is how to get rapid IT response in the real world of changing Business-Client needs - which is often driven by changes in the external, competitive, sociological and regulatory environment.

That is, in addition to pro-active changes for innovation through IT.

The interesting thing is that rapid response is not (apart from a flexible/integrated enterprise architecture), about technology.

Rapid response is about people synergy. In other words, the key to meeting the Business-IT CSF of rapid response is effective collaboration between business managers and IT people.

Yet it's unlikely you'll get this without Theory Y management (which is much simpler than it sounds), as described in one of the most important books on management, and is a must-read book:
The Human Side of Enterprise, by the late Douglas McGregor.

What's needed is a Theory Y Culture, both in IT and in the organisation as a whole, if there is to be rapid IT response to business change.

This is demonstrated by another lucid writer on Businesss with IT, Alistair Cockburn, who says (in a highly interesting article), that project success depends on people characteristics, that is, more than methodology or project discipline.

For example, minimalist documentation works best (especially if you have self-documenting code), because heavy documentation is a burden and a chore, and slows down the project, even causing it to fail. Besides, it won't be used, because people don't trust it and prefer to "look around".

Finally the Client/User, notwithstanding business responsibilities, may need to embrace a role as Business Information Systems (BIS) Designer, not just Specifier. This, instead of getting more point-and-click skills, is more likely to add value for the Client/User, and the business.

P.S.
In coal-face systems, it may be well to bring the external customer into the equation as well, to form a Synergy Circle.

What are your experience & thoughts on this?
What are the issues in getting rapid,
if not pro-active & innovative response, to business change?

Competitive Advantage & IT

Paul Otelellini, head of Intel, says that more powerful mobile devices with Wimax connection will deliver a more personal internet within five years.

And Bill Gates, head of Microsoft, says that the human-computer interface (HCI), or the way people interact with computers will change dramatically, and within five years the keyboard and mouse will become obsolete.

Not only that, but so will the desk-top become redundant, as we all migrate to more mobile working & computing.

Perhaps no surprises with any of this, but what has it to do with
Competitive Advantage & IT?

One of the big debates in Business with Information Systems & Technology is this: Should (a) innovative applications of IT be used to achieve competitive advantage, or (b) business strategy be supported by innovative applications of IT?

For example, suppose you are a CIO, a Project Manager, or other IT Manager, seeking to exceed client/user expectations. Should you be looking for innovative ways (e.g. XML and the Asus Eee PC) of using IT for reduced cost, added value or customer benefit?

Or suppose you are a business manager or executive, pursuing a new or improved product, service or business process. Should you be turning to your IT advisors for advice on how best to achieve this with innovative ways of using IT?

In other words, from which direction should the initiative come; from Business or from IT? This is what the debate is about:
Achieving competitive advantage with IT - whose job is it?

Perhaps there is no debate. Perhaps innovation & initiative with and through IT should come pro-actively & collaboratively from both directions. Therefore, what are the organisation structures, culture and development processes like; do they encourage this collaboration?

But there's a third party ; present or prospective external customers; how are they brought into into the picture? Case studies in the use of IT for competitive advantage tell us that collaboration with and through this third party, the external customer, can be vital.

Getting back to (a) better work-mobility through & with IT, and (b) better Human Computer Interface/Interaction, should the seemingly inevitable changes be seen and used pro-actively for competitive advantage, and if so, by whom and how?

We have new/improved information & communications technology (ICT) coming down the road; how might we put it to good use? We're developing this new/improved product, service or business process; how might we use ICT innovatively for competitive advantage?

The changes forecasted by Paul Otellini and Bill Gates may not be surprising, and therefore not leading and especially not bleeding edge technology. But they do provide opportunities for achieving competitive advantage with IT/ICT, and achieving this depends on the good use of people, organisation and management.

The bottom line is this:
Competitive advantage with IT is not necessarily achieved through the use of leading or bleeding edge technology.
It is often achieved
- through innovative ideas for existing technology,
and this is down to synergy in people, organisation and management.

Nonetheless, knowing what new technology is coming down the road
- and knowing how you are going to use it before it becomes available, can give serious competitive advantage.

What's your experience of using IT innovatively?
What's your opinion?

Information OverLoad Help: I

This year, 2008, may be
The Year of Information Overload,
rather than new technology.

Because, in this competitive, global-village, information-based, IT-enabled economy in which we work, organisations are Information Factories, giving, grinding and getting more and more information.

It seems to be increasing at a geometric rate, and we're not just talking about information available via the Web.

What are the real costs of Information Overload or InfoLoad where, for example, we have hundreds of incoming emails arriving daily, with every probability that this will increase in 2008?

It would be one thing if all this information were relevant, reliable and rapid, but a large part of it is not, and lacking in real value.

It's not what this Part 1 on Information Overload Help is about, but what might be needed is an Information Resource & Knowledge Manager, who would, as a key responsibility, act to cut InfoLoad. Such an overall responsibility may happen when InfoLoad reaches a tipping point, when the high cost of irrelevant and poor quality information is uncovered.

Until then, there are things that might be done, starting with a recognition of the Five General Causes of InfoLoad:

1. The View of Information as a Free Good
When you give or get an email, telephone call, written report or letter, or have a meeting, it's costing you and the other person(s) time and therefore money. It's not free, so is it relevant & required? What's the purpose? Can it be made shorter, or more structured, so as to be easier to process? In fact, is it needed?

For example, do you ever give or get something along the lines of "you might find this interesting", or turgid, complex, Victorian Novel type of letters that need to be read three times? What can you do about this?

2. Ritualistic & Indiscriminate Information-Giving
Does this happen in your organisation; the organisational version of Junk Mail? Can you influence it? What about your external and internal customers; does the information you give and they get provide net value both ways? Is there a need to audit the Information Net-Value
of routine internal & external information flows?

3. Lack of Explicit Goals & Objectives (EGOs)
There should be a purpose, goal, or objective in getting and giving information, and the more explicit it is, the better. It's likely that, of those hundreds of emails you send/receive, many have questionable value. Is there a need for a short course and/or dialogue on Giving & Getting Email?

However, it's also business information systems and business processes where the real, ingrained InfoLoad is lurking, and where explicit goals & objectives (EGOs) in information may need to be assessed. For every information flow that you receive and send, you may need to ask: what purpose is served; what's the added value?

4. Everything but the Kitchen Sink
Often, we get and give much more information than is really needed. This is because the Information System has the functionality to give it to us, and so we're given everything but the kitchen sink. That is, everything we need, and then some. The user/client might have a need for this information, so let's give it them. The Technology Tail is wagging the Business Dog.

The evidence is that giving 'em the kitchen sink, and thus bringing about InfoLoad, has a negative impact on decision making quality.
So again, we might consider Information Net-Value.

5. Ineffective Organisation
This asks whether:

1. The individual knowledge worker, manager and executive
   is effectively organised.
2. The business organisation itself is effective and fit for purpose in its structure and culture.
3. Business Information systems are aligned & integrated.
4. Business processes avoid duplication and make-work.
5. Data is integrated, administered and managed effectively.

As examples of evident remedies, InfoLoad is much less of a problem if you're personaly organised. And the organisation is effective and fit for purpose if bureaucracy is minimised.

In Part 2 we'll look at the Effects of InfoLoad,
and in Parts 3 & 4 we shall take a better look at Remedies.

In the meantime:
What's your experience with InfoLoad?
What are the big causes of it for you?