Evaluating technologies should be seen as an approach to business innovation, within a framework of business strategy and core competencies, says David Furlonger, Gartner VP of financial services.
This creates a challenge with respect to investment in innovation, he said at a presentation in Johannesburg, on using innovation to drive income, specifically within the financial services sector.
Furlonger argued that technology is a major component of infrastructure, but to determine the tangible benefits, other vital components must be assessed, including business processes, organisational structures, culture, and the difference between early adopter market penetration and mainstream customer adoption.
"Banks are no longer examining new technologies to figure out where they could be used. Now, it`s all about improving main-line business processes to enhance operational excellence, which drives far greater customer retention/growth than merely innovations on their own. Efficiency is a secondary benefit."
The variety and velocity of new technology introductions present a daunting challenge for banks, yet capital constraint narrows the list of technologies and innovations to explore, he added.
Unleash IT
Furlonger commented that, when the investment services industry comes to grips with the fundamental challenges facing it, it would be able to unleash and harness the power of IT.
"Some of the problems with our industry are due to over-hyped promises - some from the misuse or mismanagement of technology and some from outright fraud, but the majority are due to the overwhelming complexity and immaturity of the technologies and, critically, the business processes themselves."
The world`s best technology end-users have achieved amazing results by focusing on the real value - the applications - and have been extremely smart in overcoming the inherent difficulties of designing, building and deploying these complex sets of technologies, Furlonger stated.
"In other words, these end-users have employed highly talented people to fix IT`s core problems. However, this can`t and won`t continue. It`s time for our industry to finally address these issues, and it`s doing so.
"It won`t be perfected overnight, but by 2007, the cost and time to build and maintain tremendous, new applications will be a fraction of today`s levels. Unfortunately, too many vendors believe their businesses will recover when business spending improves, and that they can continue along, business as usual. This is a terribly flawed notion for most vendors, but not all of them."
Sustainability is key
Furlonger stressed that, by 2007, the focus of business investment and innovation in IT must be to improve the productivity of knowledge workers, especially in their inter-enterprise collaborations. He added that while innovation is important, so is sustainability.
He urged organisations to formulate and communicate a viewpoint for all prevalent and emerging technologies - even those that are not relevant to the company, as articulating a position on less relevant technologies will help to avoid rogue investments.
In addition, he said, having specific contingency plans for innovations that are deferred will prepare organisations for rapid response to first-to-market competitors.
Furlonger also recommended that organisations align emerging technologies with business priorities, and develop a strategy for evaluating an emerging technology`s ability to address existing business goals.
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