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How do you view ICT? Is it a source of competitive advantages for businesses or is it merely
an enabler of it? That’s a great question. I think that the
problem is that in the past, everyone looked at all of IT together, but in fact in every
business, some parts of IT are commodities, just an enabler, and some can be true sources
of competitive advantage. For example, a lot of companies are using collaborative techniques
to gain some advantages in their management style and management culture.
How do you look at organizational investment on ICT? How should it be?
I think the main point is that, like any other investment, IT intensive projects and programs
should be viewed and managed in terms of business value – from cradle to grave, all the way
from planning through implementation and benefits realization, using the same model of value
including financial, strategic and risk mitigation value.
In one of the very famous & argumentative articles about the value of IT, “IT Doesn’t
Matter”, Nicholas Carr said that IT is mainly an infrastructural technology as opposed to
a proprietary technology that can lend itself to some exclusive advantages for businesses.
On which side do you think ICT fits – proprietary or infrastructural?
In all businesses, some aspects of IT are infrastructural. Very few companies would
claim that their email system is really a competitive advantage for them. But in all
businesses, some aspects of ICT can be used to drive competitive success. The problem
is this depends on a deep understanding of their business model and how they can win
as a business [due to the integration of ICT], for instance, if they win through achieving
a deeper, more intimate relationship with their customers. Often types of business intelligence
can be used to really drive knowledge and understanding of a business.
If [a business’] advantage is through a low cost – high availability B2C [Business
– to – Consumer] product for example, often there can be an advantage in the supply
chain technologies. But that’s not the same for every company. So, IT has a competitive
advantage not as much as IT embedded in a business system.
Mentioning value chains, what role can ICT play in a business value chain – does it
only operate it or offer something more? ICT can make the whole value chain or parts
of it – internal or external - more efficient. It can also change the way in which the company
interacts with others in the value chain, or the value eco-system. IT can also change
how you can partner in the eco-system: what you out-source, what you in-source and how
you can connect with your partners. So I think IT works both in and on the value chain.
How can an organization evaluate its IT expenditure and do you think IT success is measurable?
In terms of success, one should measure the business value generated, whether it is free
cash flow, economic value or net present value. So, first of all, I think you should measure
IT success like any other investment – in terms of value added. In terms of evaluating
how much is spent on IT, I think it is very important not to look at IT as a whole, but
to separate IT into: run-the-business IT, grow-the-business IT and transform-the-business
IT because they are managed differently. Run-the-business IT should be managed for
cost and quality, but grow and transform-the-business IT is a strategic business decision. Looking
at IT cost as a whole can be a mistake but splitting IT into [the 3 categories] can be
very helpful. Some argue that instead of building a business
strategy and then trying to find the IT resources that would fit or achieve this strategy; the
process should be reversed – building your strategy around your IT capabilities. Which
should come first: the strategy or IT investment? In an ideal world, we would be talking about
an outside-in IT strategy that starts with the demand: what business are we in, and where
do we play as a business and how will we win and then translate that into what IT resources
and other resources do we need to apply to support that position. In reality, sometimes
resources – such as money, talent and skills - are scarce. So I think it’s a combination
of this outside-in picture and also recognition of the reality of the legacy systems and processes
that we have, as well as the talents available to us. So, it’s mainly an outside in with
some practical supply side considerations. Finally, how do you think ICT can be helpful
to SMEs as opposed to larger organizations that may have more resources?
I think SMEs have limited resources to compete against larger organizations, which means
they need to be more strategic not less. Quite often, SMEs are less disciplined about strategy
and more tactical running around. Actually the imperative is for SMEs to do less better
stuff not more stuff. The second point is agility – the advantage of SMEs is that
they can be more agile than larger competitors. That could be financial, operational, technical
agility or scalability in infrastructure. SMEs should try to work out what it means
to them to be agile – being very flexible where you need to be but where you don’t
need to be driving out flexibility, being very standardized, centralized and simple.