Information technology as a state of mind

I have often thought, and I am sure that you have, about the way in which some organisations apply information technology to do the same old things and how some organisations appear to soar way above that in getting an exceptional payback from their IT investment.

I began to see very clearly the different faces of IT and its business applications.

While thinking along that track and considering the core focus areas for our company, and assessing and setting priorities, I began to see very clearly the different faces of IT and its business applications.

Although I expected to see a revolution, it is much more about accelerated evolution. It is whether the organisation has the maturity and mindset to take advantage of IT that determines where it is and could be on this evolutionary scale.

In the first pass through this thinking there appeared to be two major phases. Firstly, the stuff that we have been doing for some time: automation, cost control and efficiency. In this category, the focus is strongly on cost control and it is typified by applications such as ledgers, payroll and suchlike. This is the base. Without having done this properly, an organisation is clearly not even out of the starting blocks.

The second section looked and felt to me like a business enhancement phase, where the business is starting to apply technology to grow its revenue and market expansion. This, I felt, hinges strongly on the business and IT alignment achieved within the organisation and the ability to think about and apply IT for business expansion purposes. Lately, though, it is becoming clear that there are more subtle phases embedded in this.

There is definitely a phase where the company applies technology to improve the many processes and lifecycles around which its business revolves in order to achieve business enhancement. These are the trends we have noticed and leveraged recently. These trends centre on initiatives such as supply chain management, the drive around customer service and user empowerment in the firm. What strikes me about this phase is that it is still pretty much viewed as an "improvement" phase. The organisation is concerned and engaged in making things better, and is not into radical change.

The other interesting aspect of this phase is that there is a distinct and recognisable convergence between business and technology, and the technology becomes pretty much woven into the fabric of the business.

This sets the scene for phase three scenarios, which are the domain of radical innovation. This is the space in which organisations apply technology to achieve significant business expansion, find and leverage new business opportunities on the back of IT and get into radically changing areas within their organisation. Here we are looking at initiatives such as electronic commerce and radical process redesign or re-invention. This is the domain of very high business impact.

I must stress that the focus here is not on technology but on business, and as always it hinges on the level and quality of the alignment between business and IT. This phase is definitely business re-invention and driving for competitive advantage.

The other interesting aspect of this is the level of convergence in the organisational consciousness regarding IT. Not only is IT woven into the fabric of the organisation and the way in which it operates; it is part of the "thinking" of the organisation. Imagine the power of getting to this evolutionary phase. Imagine the value and opportunities that can be unleashed when a company achieves this level of fundamental understanding and integration of its enabling technologies.

As with almost everything in life though, the benefits as the organisation moves along this evolutionary line are based on the risk-reward model. Clearly, phase three is more risky and is dependent on many organisational factors.

It is also evident in some of the examples I have looked at that phase three hinges on the markets one is addressing. For example, is the business in a consumer market? And what of the industry in which it operates? This clearly supports the notion that phase three is about business and technology convergence.

It is the combined understanding of technology and intrinsic understanding of markets and industries that unleashes the level of innovation that should be the hallmark of this phase. I strongly believe this is as much a state of mind as an organisational state.

I don`t believe that these phases have to follow chronologically across the entire organisation. I believe different areas of a firm may be pushing ahead and be at different phases of this evolutionary process.

Generally not too many companies are operating at level two and very few at level three. Finally, the dilemma for many organisations must be that many new emerging players start life at phase three.

They invent their very businesses on the back of technology and intrinsically structure their businesses this way. Typically, these startup entrepreneurs are fully evolved to where business and technology convergence is a state of mind.