Something is going on at the intersection of business strategy and IT. In the past, there was the notion that business strategy drove IT -- there would be a lot of strategising by the business people and then a handover to the technology manager for implementation.
Today, companies do not have to choose between low-cost and differentiation strategies. IT makes both possible.
Now technology is increasingly seen as a key business enabler. Executives who formulate their business strategies in the absence of an understanding and without a consideration of IT put their organisations at a distinct disadvantage. Today, companies do not have to choose between low-cost and differentiation strategies. IT makes both possible.
In the past, the large ate the small as economies of scale and geography created barriers to entry for competitors. Today, IT gives small companies the same advantages as large companies and size is often a liability.
In the past, at least the competition was clear and from within the same industry. Today, IT has opened the opportunity for significant competitors from outside traditional industries.
Just consider the way in which retail has moved into insurance and banking services. Think about the changing nature of how business works. For example, insurance is sold over the telephone and at till points while the Web potentially disintermediates and obsoletes service industries such as travel, software distribution and many types of booking systems.
Think about the very nature of retail changing as direct marketing and the Web allow users to bypass stores by linking up to the wholesaler and manufacturer.
A recent story in Wired magazine says: "It`s! Not! Retail! -- With 1 million products online, handling $100 million in transactions a month, Walter Forbes and CUC are inventing the future of retailing, or whatever they call it." This is vastly improved direct marketing, a truly post-industrial approach.
It strongly suggests we need a new way of working -- a method for bringing together the power and understanding of business, technology and consulting people.
It is no longer possible to create business solutions by working in isolation. These key parties have to work together creatively, effectively, passionately. As an IT industry we need to seriously work toward new approaches to leverage the huge potential such a creative process can deliver to our customers and their businesses.
This calls for new ways of thinking, working and understanding the business innovation locked up in technologies and trends, such as:
- The Web, which is becoming increasingly ubiquitous and serving customised products to individual customers.
- Business intelligence technologies like data warehousing and data mining that allow us to make discoveries in that data which we could not have imagined. This creates an environment to support a completely different set of business solutions.
- Technology-enabled customer relationship management -- like call centre technologies, electronic selling, push technologies and database marketing -- that allow us to operate more flexibly and to know our customers more intimately, allowing us to build long-term relationships with them.
- Object technologies, which closely resemble the architectures of these new business structures and therefore allow one to think completely differently about these systems and the time it takes to deliver them.
- Peopleless processes and business process engineering, which provides an implementable guideline for engineering the "new organisation".
These are a few examples to set the scene. The technology is there and is developing at a rapid pace. What is missing for many organisations is a way to make it work for them -- a process that helps them unleash this power in pursuit of competitive advantage.
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