CEOs are responsible for directing high-level strategy and ensuring growth and long-term viability. For those who run publicly traded companies, exceeding shareholder and market expectations is always top of mind.
That is why sustainability -- the capacity to ensure business success in the present while preserving the ability to do the same in the future -- will be a primary focus for CEOs in 2013.
In the business context, sustainability is about taking a holistic approach to the long-term viability of an enterprise in the midst of social, environmental and economic forces. At a practical level, it involves the ability to increase revenue, improve profit margins and protect the business' future competitive advantage.
2013 IT OUTLOOK: Innovation trumps cost-cutting
Technology will play a vital role in helping companies achieve this goal -- thanks in part to the evolving role of the IT organization, which has shifted dramatically in recent years. Where IT once focused solely on technology and "the business" focused on profitability, today business and IT functions have converged. In a sense, IT has "become the business" since virtually all business processes reside there now. And while CEOs are not concerned with the bits and bytes of technology (nor should they be), they are better informed about technology than ever before and have high expectations for how it can help improve the bottom line in 2013.
Traditionally, a company's options for increasing revenue have been obvious: Sell more products, raise prices, or grow the existing customer base. To achieve long-term revenue growth, however, enterprises must develop new products and services that enable them to extend their reach into adjacent and emerging markets. The mobile market is one such example, where growth is relentless and tremendous untapped potential still exists for businesses of all kinds.
For enterprises to capitalize on these types of opportunities -- and achieve that sustainability they're aiming for -- they must be able to deliver true business value through two important avenues: innovation and time to market.
Technically speaking, innovation is the introduction of something new. Nearly every company claims to be innovative, but what does that really mean? Innovation isn't just about delivering a new product or service to the marketplace; it's about that product or service making a significant bottom-line impact on the business. If a company introduces a new widget that no one wants or buys, what good is it? Innovation without business or social impact is not really innovation at all.
As it turns out, innovation and time to market go hand in hand. Companies that are the first to deliver a unique product or service are more likely to be seen as innovative market leaders. Conversely, companies that take a long time to develop products are seen as followers -- or are not seen at all. In a highly competitive business climate, time to market is a crucial differentiator that can give one company a dramatic advantage over its competitors. And, of course, enterprises that successfully improve time to market enable their clients, in turn, to achieve more success with their own customers. This ultimately helps companies expand their customer base and garner customer loyalty.
Time to market is an area where technology has played a critical role, enabling organizations to automate and streamline processes. A product or service that used to take a year and thousands of people to bring to market now might take days or even hours and far fewer people.
Technology aside, however, an organization must work well cross-functionally in order to improve time to market. Again, this is where the converged role of business and IT has become pivotal. Business units -- IT included -- can't operate in a vacuum. The business case for a new product or service must be understood by all groups involved. It must start at the top and be driven down through the organization -- all the way to IT. It is only by operating synergistically that organizations are able to truly improve their time to market.
With continuing technological innovation and the capacity to store unfathomable amounts of data (especially in the cloud), many enterprises are sitting on a gold mine of customer and market intelligence. Surprisingly, however, many have not even begun to realize the latent value of these IT artifacts, nor have they discovered how to use this data to their advantage. Here again is where technology -- specifically, sophisticated analytic tools -- can have a decided business impact in 2013. Companies that are able to aggregate that data and mine it for legitimate business purposes will establish a substantial lead over their competitors. This is where the most potential for business value can be realized in the coming year.
Boosting profit margins
Although raising prices can have a positive effect on profit margins, it carries with it the risk of losing loyal customers. As a result, companies often see more benefit by focusing on reducing expenses. One way is by driving operational efficiencies, especially in IT.
This is not a new concept for IT, which has been tasked to "do more with less" for years. What is new is IT's ability to take advantage of recent advances in cloud technology. By leveraging any number of unique cloud deployment models, companies can get the raw processing power and storage capacity they need to support their growing businesses -- without incurring the expense of building out and managing their own data centers and associated infrastructure.
Additionally, advances in IaaS and SaaS give small and midsize businesses a tremendous advantage and present very low barriers to entry. For example, if a payment gateway needed to operate an e-commerce business were available as a service, why wouldn't a company choose that option over developing their own? A decade ago, such a gateway would not have been commercially available and would have taken nine to 12 months to build. Today, a company that buys that service can get a jump on its competitors, focusing on content and the critical products it brings to market rather than on the tools it needs to operate.
The caveat with cloud is that enterprises must carefully evaluate payment models to ensure that a cloud deployment can really save them money in the long run. Cloud security is still a concern as well, but significant advances in this area are being made as vendors rush to fill security needs as quickly as they arise.
To go back to the original premise then, sustainability is as much about protecting the business as it is about growing revenue and profit margins. While "protection" is often equated with security -- mitigating obvious threats to systems, resources and IP -- in a broader sense, it's about ensuring that the company can maintain the integrity of its brand and ensure its competitive advantage. This is essentially what is meant by sustainability -- and it will be the focus of CEOs in 2013.
Read more about infrastructure management in Network World's Infrastructure Management section.