Perspectives

Five Business Imperatives to Re-define IT Relevance

In a increasing volatile, uncertain, complex and ambiguous business environment and against the backdrop of emerging business imperatives and relevance for IT, many businesses and their leaders are looking at a deeper role for IT in five new areas.

customer intimacy, supply chain digitization, people partnership, institutionalized risk alertness and innovation culture.

These five areas may sound similar to the existing practices of CRM, SCM, HCM and RM, but they are not just applications and technology solutions as represented by the acronyms. These five areas are the initiatives of the business and functional leaders in an organization and can be enabled by many type of technology in many different ways. Here I am not talking about the specific technologies.

Let’s understand what exactly these five initiatives are.

1. Customer Intimacy

Being constantly in touch with customers, knowing their needs and tastes is not new but doing so in a continuous and almost real time manner is new. The earlier paradigm of market planning which consisted of long cycles of target definition, product creation, market research, pricing, distribution, and after sales service is inadequate in the changing times. The new business imperatives demand that the cycle be compressed in a cost effective manner whilst ensuring that it does not lose its effectiveness in achieving the objectives.

Capturing, storing, retrieving, and using existing knowledge about customers in novel ways is the need of the hour. The challenge is further exacerbated when the in-house know-how has to be complemented by the knowledge existing in the external domain (mainly the internet). Driving customer interaction programs, collecting vital pieces of information from such programs, keeping sensors in vital places where customers interact with each other, and creating a small piece of usable knowledge from huge piles of irrelevant information, needs to be a regular and widespread practice. Further integrating that with the internal know-how stored in the IT system, helps create the desired intimacy with the customers.

2. Supply Chain Digitization

By supply chain I refer to both the inward supplies to the business and the outward distribution from the business. Supply chain digitization is a source of cost control (achieved through efficiency drive) and business agility (the capability to serve heterogeneous customer segments with multiple products and services). Both the procurement and the distribution side can find relevance for these two sources. First let’s talk about the procurement side. Some of the businesses I have interacted with have been working on the agenda of controlling the cost of procurement through ‘lowest price’ discovery and ‘just in time’ delivery. With input costs rising and prices remaining uncertain, the need for better visibility on prices is a business requirement. How IT can help in doing this is an area of interest for many. The existing business processes of procurement is not the focus here, but rather the focus is on how the information from them can be leveraged to devise new and appropriate processes, to respond to the need of price discovery and fast delivery by the suppliers.

The distribution side of the business needs not only the existing processes to be more efficient and effective, but also newer processes which address multiple user segments with multiple products and services. My interaction with businesses brought forth the endeavors they are pursuing and the kind of newer capabilities they need, e.g., faster turnaround of channel initiatives, ‘just in time’ inventory replenishment of multiple variants of the products at the distributors level and warehouses level, the right ordering and the right delivery.

3. People Partnership

The flux organizations are experiencing today can be handled only by ensuring a larger participation by people at all levels. No more can people be expected to merely confirm and adhere to decisions taken by a few at the top. Contemporary market challenges require organizations to distribute power from the center to the periphery, especially to the customer facing functions. IT has traditionally been used as a control tool in the hands of the top management, who want to make informed decisions. These decisions affect the organizations and those who work there. However, with the need for higher agility, the same decisions need to be taken on the ground without spending time in long decisions cycles. The new relevance for IT is to empower people with information and the power to make decisions. Many organizations in sectors like FMCG, insurance etc. are looking at devising new ways to empower their front end employees and agents. The aspect of people participation is not just restricted to information availability and more power to take decisions; it also includes the aspects of learning, development, engagement and motivation. I have found that many CEOs talk about their dream to create an organization of choice for their employees. They should realize that IT can play a more meaningful role in their endeavor of creating a great place to work. IT is needed not only to adequately automate processes that include sales, marketing, collaborative, leadership development and many others, but also to further create analytics capabilities on top of them.

4. Institutionalized Risk Alertness

Risk alertness is not just about the big things like governance frameworks, high level risk modelling and assessment, scenario planning, security software etc. It is also about awareness at a broader organizational level among a larger set of employees, about the risk of product failures, the inability to hire the right candidates, the inability to capture or let go of fleeting opportunities in the market, failure to operationally leverage the acquired abilities etc. When this awareness is met with empowerment from top, real time information availability to sense the danger, and the structural mechanisms (like monthly meets, quarterly reviews, weekly huddles etc.) to act, it creates a broader and institutionalized risk alertness capacity in the organization.

5. Innovation Culture

Innovation has to be the way of life and innovation will surely not happen in the laboratories. It will happen on the ground, while making the strategy, while implementing the plans, while creating the products and services, while delivering them to the buyers and while interacting with the customers. It has to support customer intimacy, be built upon people partnership, efficiently and effectively be supported by the supply chain digitization and be defended through institutionalized risk alertness. Building innovation culture is about information leverage, the vision set by the top management, structures built to implement the vision, and people readiness and motivation to practice it.

All of these five business initiatives can be enabled by ‘information’, and hence, they define the emerging relevance for information technology adoption and usage. A question that every organization should ask is how prepared are its organizational capabilities to compete in the emerging paradigm.

 

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