SNw 001 Competitive Advantage -- The Next Ten Years Created by James on 6/13/2013 2:44:32 PM
(THE CRITICAL FACTORS IN I.T. INVESTMENT SUCCESS)
Sixty years after World War II we live in an age like no other.
The differentiators of past decades are necessisties for survival.
How will corporations differentiate themselves and grow in the next ten years?
(Notwithstanding the 70% outright failure rate of I.T. investments)
In the 1960's production capacity was a core requirement -- could companines procuce sufficient quantities of their goods or services to satisfy demand?
In the 1970's sales capability became critical -- could companies sell what they could produce?
In the 1980's financial control was critical -- could companies control costs? (just in time, activity based costing, etcetera)
In the 1990's and beyond all of these are essential entry level requirements for continued existence -- we are faced with:
-- a global economy like no other in history,
-- a global population greater than could have been envisaged a few decades ago,
-- mergers and acquisitions resulting in larger and larger corporations,
-- computer technology that far exceeds the expectations of a few decades ago
how do corporations survive, let alone thrive, under these conditions?
The World Competitiveness Report 1993
In 1993 the world competitiveness report and other authorities suggested three areas where competitive advantage lay for nations and, by extension, businesses:
-- Market focussed strategy
-- Utilization of the human resource
-- Effective management decision making
All of these are challenging "soft issue" areas that remain challenges to most organizations today.
In all of these areas creative use of computer technology in support of effective human operation represent major opportunities for most organizations. Clear definition of critical issues, critical requirements, etc is an essential component of any solution.
Challenges in 2006
In addition to the factors mentioned above, other challenges facing business today include:
-- Business integration -- the ability of all the human beings in an organization to inter-operate and function cohesively as one unit.
-- Effective use of information technology -- 70% of I.T. investments fail totally, another 20% perform sub-optimally and "19 out of 20 E.R.P. implementations fail to deliver what was promised" (Financial Mail).
-- Effective decision support -- "most organizations are not making better decisions than they did five years ago" (Gartner)
Some Thoughts -- The Next Ten Years
Effective strategic analysis, strategic solution design and solution implementation -- strategic capability -- the ability to define a competitively successful future position, understand the current position and current trend, map out a path to the future and to get there is a core competence required for organizations to thrive and prosper in the decade ahead.
In my research into the reasons why I.T. investments fail and the critical factors for I.T. investment success I have come to understand that the factors giving rise to I.T. under performance and failure are largely the same as those giving rise to the 90% failure rate of strategic planning initiatives -- they relate to people, the ability of people to respond to change, to communicate, to sustain change, to embrace and implement new concepts, a smorgasbord of issues that all represent challenges to people that is outside the scope of this present article (more information is available in the book "The Critical Factors for I.T. Investment Success", refer www.jar-a.com
A key requirement is the ability of teams of leaders to pool their collective knowledge and experience (wisdom) to arrive at the best possible solutions. The method outlined below is highly effective for this.
A Useful Technique -- Strategic SnapShots -- Critical Issues Business Analysis
A specific component of the challenges mentioned above is the ability of organizations to synthesize and integrate the full intellectual and experiential capability and capacity of leaders at every level and harness this intellect to produce coherent, comprehensive integrated plans to achieve both strategic and operational objectives. Our full strategic analysis, design and implementation method caters for all that is required in detail but is outside the scope of this article.
A critical technique on which our approach is based is critical issues business analysis.
I would like to outline the approach in a form that you can take and apply immediately.
1. Formulate the correct question -- this could be "Critical Concerns for the Next Decade", "Critical Requirements for ... System", or any other question that may require the input of a team of people in order to formulate the best solution -- remember "if you ask the wrong question you will get the wrong answer" -- formulating the RIGHT QUESTION is vital.
2. Brainstorm all issues that come to mind relating to the question and write them on a pad or flip chart or type into a computer -- preferably do this so that all participants can see -- no discussion, no critique of other inputs, no wrong answers, just brainstorm until the team has listed everything they can think of -- could be ten issues but can be several hundred -- depends on the team, the question and the facilitator.
3. Private analysis of the critical factors -- I recommend no more than seven factors, each person applies their mind individually to develop seven concise statements that embrace the critical essence of all the brainstorm points -- no discussion, each person does this on their own.
4. Group synthesis of the critical factors -- pick one person to read out their seven factors and then each delegate adds to the list additional factors that they have developed -- again, no discussion, list all the factors developed by the delegates -- THEN combine, edit, modify and synthesize all the factors listed by all the delegates into omnibus statements that capture the collective thinking of the group, again I recommend seven factors.
5. Summarize -- on completion of the previous step there are generally a set of fairly lengthy portions of text pasted together -- collectively extract a word or phrase that summarizes the headline concept of each of the seven points and place that at the head of each point.
6. Weight relative importance -- each delegate allocates 100% of importance over the seven points and individual results are then captured on flip chart or computer and discussed. Invariably this step reveals major differences in priorities amongst even the most established working teams -- note issues, agree a set of weights to apply to the planning process and move on.
7. Score performance -- each delegate scores each factor from 0 to 10 in terms of "how well are we doing" relative to historic, current, forecast and objective over an agreed planning period, typically one to five years. Scoring is again done privately and then captured and displayed to the team. This step gives a weighted numeric measure of how well the delegates think the organization will be doing on these points versus how well they would like it to be doing.
8. Develop a detailed action plan and execute -- the gap determined in the previous step is then analysed to produce an action plan which in turn is tested against the factors causing failure and the factors for success in order to ensure that a practical "doable" plan results.
The above analysis is simple and powerful and a very useful technique in diverse business situations and harnesses the collective knowledge and experience of a group of people in an effective and concise manner that limits discussion and maximizes quality output.
These steps can be applied to critical issues analysis of market forces, market critical success factors, market attractiveness factors, market segments, etcetera.
They can also be applied to determine critical competence (knowledge and experience) required for human resource appointment and development.
If effectively applied in defining critical information needs for a new E.R.P. or M.I.S. they can create a foundation for effective management decision support.
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