Saturday | 11 October, 2008
Computerworld
IT and the responsive economy
Companies are finding it more profitable to be responsive than to be efficient
Michael H. Hugos 17/05/2007 14:13:09

Computerworld Buyer's Guide - Vendors Matched to this Article
Related Features
  • +

    Strategies for Dealing With IT Complexity 24/12/2007 10:30:47

    Every innovation, every business process improvement, comes with an IT complexity tax that must be paid by CIOs in time, money and sweat. Here are strategies to mitigate the increasing complexity of IT as it enables new business.
    Every innovation, every business process improvement, comes with an IT complexity tax that must be paid by CIOs in time, money and sweat. Here are strategies to mitigate the increasing complexity of IT as it enables new business.
  • +

    What Price Innovation? 05/11/2007 13:44:31

    CIOs say they want more than the traditional “your mess for less” relationship with their outsourcing providers. And the providers want to market themselves as partners in innovation. So why isn’t it happening?
    CIOs say they want more than the traditional "your mess for less" relationship with their outsourcing providers. And the providers want to market themselves as partners in innovation. So why isn't it happening?
  • +

    Doing Your Sums on . . . Build, Buy or Rent 05/11/2007 13:32:30

    You’re trying to build a world-class IT team, but everyone’s going after the same talent pool. What mix works best? Should you grow your own, draft your players or barter your way to the line-up you want to field?
    CIOs should never forget that while new technologies have a maturity cycle, the maturity cycle for human beings in IT is even longer
  • +

    How to Get Real About Strategic Planning 04/02/2008 12:50:59

    Everyone agrees that having a strategic plan for IT is a good thing but most CIOs approach the process with fear and loathing. In fact, the majority of CIOs (and the enterprises they work for) are faking it when it comes to strategic planning. Isn't it time we all got real?
    Oh, it must be nice to be the CIO of a FedEx or a GE or a Credit Suisse. Places where IT and the business are so tightly aligned you can barely tell the two apart. Where corporate leaders understand that IT is a strategic asset and support it as such
  • +

    Process Trip 04/02/2008 13:07:03

    Why Maritz Travel revamped key business processes — and how business and IT came together to make it work
    When Rich Phillips became COO OF Maritz Travel about two and-a-half years ago, he sat down and took a hard look at the big industry picture
Additional Resources
Executive Guides
Whitepapers
Zones
Zone logoZones provide focussed content from Computerworld and leading technology partners.

Newsletter Subscription

Sign up for our Computerworld newsletters!
Computerworld's twice-daily news service keeps you in touch with the latest, most important headlines from Australia and around the world.
Keep up with the latest virtualisation technologies, products, news and features.
RSS Feeds

The emergence of the Internet and the Web have led to disruptive changes in companies' IT infrastructures. Ready or not, it's happening again. But this time, the changes will be bigger and they will come faster. IT departments will have to be more responsive because, at root, that's what these changes are all about.

Four technologies -- server virtualization, grid computing, service-oriented architecture and software as a service -- are facilitating these changes. But the real driver of the changes is this one central reality: In the high-change global economy we now live in, companies are finding it more profitable to be responsive than to be efficient.

Efficiency was the driver of the industrial economy. Slower and more predictable than the global, information-dependent one of today, that economy endured for decades. To prevail in that older economy, companies had to take time to organize themselves as models of efficiency so they could deliver their products at the lowest cost. Once they had done that, they ran their operations without further change for years and reaped the benefits. The assembly line, cranking out mass-produced goods with economies of scale, was the embodiment of that efficiency.

Today, the economy is much less predictable, and rigid concepts of efficiency no longer work, because conditions change so fast. What was most efficient last week suddenly isn't most efficient this week. Successful companies are learning to compete by being more agile and more responsive to continuous change and to the evolving needs of their customers.

Consider this: People want a good price, but that doesn't mean they want the lowest price. A basic pair of sneakers costs $20 or less, but people spend five times that amount for sneakers that fulfill something beyond their basic needs. A superefficient shoe company can make sneakers cheaply and sell them profitably for less than the cost of a month of dial-up service. But much larger profits are available to the company that is merely efficient enough and instead turns its attention to being highly responsive to consumers' evolving demands for athletic shoes that go beyond the basics.

Here's what this will mean for IT in the next few years. Companies need IT infrastructures that will accommodate continuous, incremental change in their operations. To that end, they will use server virtualization and service-oriented architecture to leverage their existing IT investments and get the flexibility and responsiveness they want.

Companies will then move on from server virtualization to outsourced grid computing and from service-oriented architecture to outsourced software as a service, as hardware and software vendors become utilities that offer reliable computing power and basic applications like e-mail, ERP and CRM. They will be able to offer their services at a much lower cost than what most companies would spend to do it in-house. Companies will outsource more and more of their basic IT operations so that they can remain efficient enough in their operating costs. What they keep internally will be the ability to be responsive.

The IT groups that remain within companies will change their focus from data center operations to the design, construction and constant adjustment of systems that meet ever-changing business conditions. The value of IT groups within most companies will no longer be measured by how well they operate information technology but by how well they combine technology with business processes to create a stream of responsive and profitable products and services for their companies' customers.

Computerworld Buyer's Guide - Vendors Matched to this Article
Market Place

Computerworld Member Login


 

Smart SOA World Tour

Discover how SOA can create smarter outcomes for your business.

Attend and learn:

  • How SOA is helping leading companies to become more agile
  • Where you should be applying SOA processes in your company
  • The top SOA implementation mistakes to avoid

Click here for more information.
Whitepaper

Email Archiving 101—Customer Case Study

Join Lee Benjamin, a Microsoft Exchange MVP and Ryan Shipkowski, network administrator for Matthews, to discuss the process and ROI of implementing an email archiving solution, with emphasis on a case study from Matthews International.

Enterprise IT Buyer's Guide
Find Technology Vendors Fast
 
Find vendors by name | Find by category
Sponsored Links