New technologies such as cloud computing, mobile and social media should be viewed under the lens of business, and sometimes other industries' business.
That's the word from Dave Aron, Gartner VP and fellow in the CIO research group, who says IT can help play with the boundaries and thereby change the business model, critical competences and sources of power.
"What happens when IT isn't about innovating the business as it is, but becomes about informing business about new models and new ways of competing?" he asks.
"Technology is driving a new wave of business innovation. CEOs and CIOs recognise the digital innovation imperative and the technology pipeline is pretty full. But the value doesn't come from the technology itself: it comes from the technology plus the business process change and the culture change and the business model change."
Aron says the Gartner hype cycle model shows when a technology is mature, but it doesn't reveal how valuable technology is to a particular enterprise.
"That is very contextual to your business and your business model. For instance, Wal-Mart invested billions in RFID tags long before the technology had matured."
He says the CEOs on his advisory panel don't want to talk about cloud computing, virtualisation or social networking. They want to talk about business model innovations that could be driven by some or all of these technologies.
"For example, Japanese spectacle manufacturer Megane 21, which was founded based on the CEO's hatred of bureaucracy and desire to empower employees, allows any employee in the business to change the business at any time, as long as they blog about it and get feedback for three days. And they only hire people who are comfortable with that level of automation. It's resulted in a compound annual growth rate of 21%."
Improving the framework
Aron says Gartner's six-part model of a business framework has opportunities in each part for improvement.
"First, there is ideation and decision-making: how do you think about things and do R&D? Crowd-based design is an interesting possibility here. Second, how do you then create products, services, communities and values?
“Thirdly, there is customer engagement: how do you market, sell and do logistics? Fourth, there is the customer experience itself. In the example of manufacturer SKF, the current customer experience is buying ball bearings, but the planned one is guaranteed machine uptime.
“Fifth, there's monetisation: how do you make money and exchange value with your customer and other parties? Finally, there is learning and change: how does your organisation sense weak signals and execute change to the business model?
“Asking the question 'how can social networks help our business?' is not a very targeted or helpful question. How can social networks help us come up with new ideas is much more helpful."
One way Aron recommends is stealing ideas from other industries. "Hotel owner Whitbread noticed that its business was very similar to airlines: looking after busy customers for short periods of time, so they changed their model based on that similarity.
“It's called analogy-hunting. Best practice will only get you so far: by definition it won't get you a competitive edge. You need to steal things from other industries."
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