Who invented the Internet? [Organizations and Markets]
The Internet redefined the business and consumer landscape, transforming our lives in the process. Sometimes an idea is so powerful that it succeeds despite our best efforts to kill it, and it takes a broad group of stakeholders to make it happen.
Another week and another collection of interesting ideas from around the Internet.
As always, thoughts and/or comments are greatly appreciated.
Beyond Borders: The Global Innovation 1000 [Booz & Company]
Booz & Company’s fourth annual of the top 1000 R&D spenders. The study found that the U.S. received more money from foreign companies to develop products than any other nation in the last year—establishing the U.S. as the global outsourcing destination for innovation.
Why traditional recession tactics are doomed to fail this time [Harvard Business]
The tactics of recession-as-usual are neither necessary nor sufficient for firms to weather the global economic superstorm—because it’s no ordinary squall, but a once-in-a-lifetime gale ripping up the very foundations of theglobal economic order. Strategists must rediscover the lost art of authentic value creation and find new, innovative, sources of value.
The worldwide economic crisis has caused business to completely reevaluate spending priorities, and IT is no exception. What strategies must CIOs consider during the downturn? What impact will a difficult economic climate in 2009 have on enterprise technology spending?
Topics covered include:
What IT projects are likely to be cut immediately?
What IT projects will likely survive — what can’t we live without?
What advice do we have for CIOs evaluating IT projects. Is this the catalyst for more spending on outsourcing, SAAS, etc?
Other observations about the impact of worldwide downturn? eg. will this redefine how we think about sourcing IT products? What solutions should CIOs bring to the boardroom?
About The Scoop
The Scoop is an open, free-flowing conversation between industry peers. It’s about unpacking issues that affect CIOs, senior IT executives and the Australian technology industry. The conversation is moderated by Mark Jones, The Scoop’s host and producer. More information about The Scoop, including a list of previous guests, can be found here:
Touching and hearing the past in Dresden [psfk]
Those who visit Brühl’s Terrace in Germany are set to get more than just pretty view. Markus Kison’s touched echo brings life to the 1945 Dresden air raids. Visitors to the area can hear the airplanes, explosions and air raid sirens of the 13th of February raids though four small, disguised sound conductors.
NASA Spinoff homepage [NASA]
NASA’s yearly Spinoff publication was recently released, celebrating the agency’s 50th anniversary with 50 ways their technology is used in everyday life.
For some time we’ve been focused on the quest of slaying the business-technology alignment dragon. We don’t seem to have succeeded—at least not very often. Worse still, the rules of the game seem to be changing as we speak. Rather than manage IT as a large capital expense and asset, aligning business and IT by aligning investment, some companies are working to find and exploit the synergies between the two. Craig’s List is taking a significant chunk of the global classified advertisement market with a staff of 20 people, while Threadless is a case study of applying similar ideas to the old world business of designing, manufacturing and selling t-shirts. These organizations are so lean that they are virtually impossible to compete against.
How do they do it? What are the insights they are finding? Where are they finding them? And, most importantly, what can we learn from them? We’ve started this email as a platform to share some of our thinking. Hopefully this will provide inspiration for applying some ideas from these new school players thinking to our old school organizations.
We’re getting it all wrong—we focused on managing the technology delivery process rather than the technology itself. Where do business process outsourcing (BPO), software as a service (SaaS), Web 2.0 and partner organisations sit in our IT strategy? All too often we focus on the delivery of large IT assets into our enterprise, missing the opportunity to leverage leaner disruptive solutions that could provide a significantly better outcome for the business.
IT departments are, by tradition, inward looking asset management functions. Initially this was a response to the huge investment and effort required to operate early mainframe computers, while more recently it has been driven by the effort required to develop and maintain increasingly complex enterprise applications. We’ve organised our IT departments around the activities we see as key to being a successful asset manager: business analysis, software development & integration, infrastructure & facilities, and project or programme management. The result is a generation of IT departments closely aligned with the enterprise application development value-chain, as we focus on managing the delivery of large IT assets into the enterprise.
Building our IT departments as enterprise application factories has been very successful, but the maturation of applications over the last decade and recent emergence of approaches like SaaS means that it has some distinct limitations today. An IT department that defines itself in terms of managing the delivery of large technology assets tends to see a large technology asset as the solution to every problem. Want to support a new pricing strategy? Need to improve cross-sell and up-sell? Looking for ways to support the sales force while in the field? Upgrade to the latest and greatest CRM solution from your vendor of choice. The investment required is grossly out of proportion with the business benefit it will bring, making it difficult to engage with the rest of the business who view IT as a cost centre rather than an enabler.
Unfortunately the structure of many of our IT departments—optimised to create large IT assets—actively prohibits any other approach. More incremental or organic approaches to meeting business needs are stopped before they even get started, killed by an organisation structure and processes that impose more overhead than they can tolerate.
Applications were rare and expensive during most of enterprise IT’s history, but today they are plentiful and (comparativly) cheap. Software as a Service (SaaS) is also emerging to provide best of breed functionality but with a utillity delivery model; leveraging an externally managed service and paying per use, rather requiring capital investment in an IT asset to provide the service internally. Our focus is increasingly turned to ensuring that business processes and activities are supported with an appropriate level of technology, leveraging solutions from traditional enterprise applications through to SaaS, outsourced solutions or even bespoke elements where we see fit. We need to be focused on managing technology enablement, rather than IT assets, and many IT departments are responding to this by reorganising their operations to explore new strategies for managing IT.
Central to this new generation of IT departments is a sound understanding of how the business needs to operate—what it wants to be famous for. The old technology centric departmental roles are being deprecated, replaced with business centric roles. One strategy is to focus on Operational Excellence, Technology Enablement and Contract Management. A number of Chief Process Officer (CPO) roles are created as part of the Operational Excellence team, each focusing on optimising one or more end-to-end processes. The role is defined and measured by the business outcomes it will deliver rather than by the technology delivery process. CPOs are also integrating themselves with organisation wide business improvement and operational excellence initiatives, taking a proactive stance with the business instead of reactively waiting for the business to identify a need.
The Technology Enablement team works with Operational Excellence to deliver the right level of technology required to support the business. Where Operational Excellence looks out into the business to gain a better understanding of how the business functions, Technology Enablement looks out into the technology community to understand what technologies and approaches can be leveraged to create the most suitable solution. (As opposed to traditional, inward focused IT department concerned with developing and managing IT assets.) These solutions can range from SaaS through to BPO, AM (application management), custom development or traditional on-premises applications. However, the mix of solutions used will change over time as we move from today’s application centric enterprise IT to new process driven approaches. Solutions today are dominated by enterprise applications (most likely via BPO or AM), but increasingly shifting to utility models such as SaaS as these offerings mature.
Finally a contract management team is responsible for managing the contractual & financial obligations, and service level agreements between the organisation and suppliers.
One pronounced effect of a strongly business focused IT organisation is the externalisation of many asset management activities. Rather than trying to be good at everything needed to deliver a world class IT estate, and ending up beginning good at nothing, the department focuses its energies on only those activities that will have the greatest impact on the business. Other activities are supported by a broad partner ecosystem: systems integrators to install applications, outsourcers for application management and business process outsourcing, and so on. Rather than ramping up for a once-in-four-year application renewal—an infrequent task for which the department has trouble retaining expertise—the partner ecosystem ensures that the IT department has access to organisations whose core focus is installing and running applications, and have been solving this problem every year for the last four years.
This approach allows the IT department to concentrate on what really matters for the business to succeed. Its focus and expertise is firmly on the activities that will have the greatest impact on the business, while a broad partner ecosystem provides world class support for the activities that it cannot afford to develop world class expertise in. Rather than representing a cost centre in the business, the IT department can be seen as an enabler, working with other business to leverage new ideas and capabilities and drive the enterprise forward.
Everyone seems to be talking about innovation these days. As business becomes increasingly competitive we jump at any new idea that might provide us with the toe hold needed to climb past our competitors. Methodologies have be developed and books written with the hope of industrializing innovation. However, innovation is a numbers game and we need to wade through hundreds of good ideas to find that one that might work. Access to (and acceptance of) good ideas might even be more important than a formal innovation business process or methodology within an organization.
So where do we find these ideas? One good source is the strange and mysterious place that is the Internet. Hidden in the Internet’s nooks and crannies we can find all sorts of new and interesting things, any of which might be the next big idea in our respective industry.
An informal network has been sharing interesting and unusual ideas from around the globe. Rather than keep these good ideas to ourselves, we thought that we would share them with our broader ecosystem. Our plan is to create a list of four to six interesting innovation things that are worth a look and which might get the creative juices flowing, and publish them every other Monday. The content will range from articles about innovation, case studies on how some companies innovate through examples of interesting (and hopefully innovative) stuff. Expect to see some old stuff refreshed if it’s still relevant. Also, if you see something interesting in your travels then send us a reference and we’ll include it in a future issue.
As always, thoughts and/or comments are greatly appreciated.
Understimulated [Innovate on Purpose]
Innovation requires the stimulation we get when we’re out in the field rubbing shoulders with customers and partners, not from the R&D lab back in head office. Too many innovation programmes fail because they are understimulated.