INTEROP - Author kicks off Interop: 'IT does matter'

IT to be the underpinnings of how businesses do business.

Interop Las Vegas kicked off Tuesday with a lecture from a college professor as the keynote address, a stark contrast to the industry luminaries who filled that slot in the past.

C.K. Prahalad, a business professor at the University of Michigan, painted a picture from his new book The New Age of Innovation, which called for IT to be the underpinnings of how businesses do business.

"The bottom line is very simple for me; IT does matter," Prahalad says, describing the databases, networks and analytic tools needed to achieve businesses that deliver individualized products.

One example he gave was health insurance for diabetics, which is often not affordable or even unavailable. In India ICIC Prudential created coverage for diabetics that lashed together a network of hospitals, doctors and gyms with individualized and measurable treatment for patients. If the patients could demonstrate that they were sticking to their treatment plans, the insurer lowered their premiums.

"This system has completely transformed the insurance industry, which did not even want to consider these patients," Prahalad says.

IT is necessary for such consumer-created, custom products, he says. "You need an extending database, analytics and flexible business processes," he says.

He cited a second example of emergency call systems in India. The system was enabled by creating a single emergency number, developing call centers, establishing response protocols, creating a consortium of participating hospitals, standardizing training and creating a way to measure performance, he says.

The result is a cost of 50 cents per person covered vs. US$100 in the United States, and an average cost per response of US$15 per call vs. US$600 to US$800 in the United States.

This system follows his view of customized services and adds the need for secure networks that insure privacy as well as tight network management, all of which fall to IT.

As businesses move toward products that use the Internet and disbursed resources to "co-create experiences" for individuals, Â the impact in the United States will be citizen-centric public services and consumer-centric global businesses, he says.

An example of a citizen-centric public service would be enabling a person getting married to fill out the forms documenting the marriage once and having all the necessary bureaucratic changes happen automatically -- something that requires strong IT infrastructure, he says.

Children who will be consumers in 10 years are already familiar with this custom model of co-created experiences via social networks, so they will not only be receptive to but also demand these services when they have their own income.

The IT challenge is creating the infrastructure that can support such businesses, Prahalad says. "The monkey is on your backs," he says.

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