Management must drive an e-transformation

"But we need to consider another big IT investment"?

Despite having spent millions on implementing ERP solutions and other state-of-the-art systems, many organisations are complaining that they do not have the right information at the right time to allow them to conduct strategic business. Some of these organisations have spent more than 25 years automating their operations and the past five years replacing those investments with ERP systems.

Various recent research studies have indicated that IT issues sit at the top of CEO agendas around the world. Industry leaders are also learning more about IT than ever before and are looking for new ways to align IT with business direction. Companies are, however, finding it difficult to measure IT's financial contribution. Yet they seem to be satisfied with IT-influenced re-engineering efforts and plan to invest more heavily in technology.

"We're about to embark on the most massive, far-reaching changes we've ever seen in our economic structure -- changes brought on by the mainstreaming of high technology" Howard Anderson, founder and president of The Yankee Group The concept that information technology brings change to business is not going to change -- it's almost as old as computing itself. For more than 40 years a constant parade of automation and innovation from IT has altered the way business is done, but what's happening now is no less than a transformation on the most fundamental business precepts: how a company does business, how it enters new markets, how it communicates across the enterprise and how it deals with suppliers.

This e-transformation is characterised by:

A rapid transfer of knowledge, both within companies and across the value chain; The participation of IT at every juncture, in business decision making; The very culture that defines a company, new products and services, new strategies; and, yesMany new technology implementations.

But most important are people with a willingness to engage and act on new ideas and new business world realities.

Essential sources

Skills and knowledge have become the only sources of sustainable long-term competitive advantage. Knowledge, which used to be tertiary -- after raw materials and capital -- in determining economic success is now primary.

Whenever he travels to speak at conferences, leadership expert Stephen Covey asks people the same question: "How many in this room would agree that the vast number of people in your organisation, possess more talent, more creativity, more initiative and more resourcefulness than their present jobs require or even allow them to use?"

Almost everyone in the room raises their hand.

This new age calls for flexible, flatter organisations and, like the Renaissance, the new style corporations will still celebrate the uniqueness of the individual.

Leave it to Dilbert (the popular comic strip character) captures the emotions of the moment: of individuals such as himself, who he describes as "corporately challenged".

If everyone is competing on the same set of variables, then the standard gets higher but no company necessarily gets ahead. And getting ahead -- then staying ahead -- is the basis of strategy: creating a competitive advantage. Strategy today is all about setting yourself apart from the competition.

It's not just a matter of being better at what you do -- it's a matter of being different at what you do.

Many companies are going to have to unlearn a lot of their past -- and also forget it! The future will not be an extrapolation of the past. Like a space rocket on the way to the moon, a company has to be willing to jettison the parts of its past which no longer contain fuel for the journey and which are becoming in effect "excess baggage".

If companies are going to unlearn many of the traditional approaches to managing, one of the best places to start is by altering the way they disseminate information.

Empowerment, flexibility and creativity only begin when information is shared, but the old style companies generally are not built for doing that.

Simple truths

New style companies recognise a simple truth: if you want your employees to act like managers -- or owners -- you have to give them all the information that is required on a need-to-know basis. If information is kept secret and not shared, there's a temptation to let ego drive the decisions and to stay with a process longer than you should. But when everyone sees the results, it requires managers to put egos away. Sharing results allows the focusing of attention on facts not emotion.

To manage this transition requires a mind-set and cultural change from three constituencies; end-user departments, IT and senior management. Each group must be aware of its new role.

Effective management requires recognising the new order and IT's changing role -- its scope is now the enterprise, its focus on bringing value to the business and architecting change. IT will be measured on its role in improving business processes, customer service and ultimately profits.

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