To keep pace in a rapidly changing
marketplace, business leaders have
found it necessary to become more innovative and adaptable in their business
models.
“To stay competitive, leaders must utilize
the power that comes from the convergence of technology and traditional business practices,” says Greg Boyd, president
of MIS Group, one of the nation’s premier
emerging software and technology services providers.
Smart Business recently spoke with
Boyd about why executives should be
more intentional with the integration of
business and technology.
What kind of questions should executives
ask when it comes to technology?
In the past, executives were comfortable
leaving technology decisions to the
‘experts.’ They focused on business operations and left the technical world to the IT
department. About the only two questions
the executive asked when it came to technology were, ‘How much is this going to
cost me?’ and, ‘Is this really necessary?’
But that has changed?
Yes. In today’s world, the management of
technology goes far beyond the IT department. Savvy leaders understand that technology doesn’t just facilitate the execution
of sound business strategies, it actually
helps shape them. When business and
technology converge within a company, it
mitigates risk in a volatile marketplace. So
the ‘convergent’ company has a decided
advantage over its competitors.
I like to illustrate it using what I call the
‘Reese’s Peanut Butter effect.’ Remember
the old Reese’s Peanut Butter Cups® commercials? One guy with a jar of peanut butter accidentally collided with a guy holding
a chocolate bar. The two ingredients
together made a better product than they
did separately. It’s the same when it comes
to business and technology. When the two
converge, the result is a better company.
But the key is that the joining must be done
on purpose, not accidentally.
Where should an executive start when it
comes to making a purposeful choice to combine business and technology?
It goes back to the questions executives
ought to be asking: What is the purpose of
technology? What processes should I automate, and why? What is the business case
for automation? These questions have traditionally been asked in the large enterprise environment but not nearly as often
in the midmarket world. There, decision-makers tend to buy products and services
to solve problems, instead of approaching
technology more holistically.
The executive who takes a birds-eye or
360-degree view of technology tends to ask
broader questions like, ‘If technology were
working throughout my business, what
would that mean in terms of profitability,
organizational performance, governance
and risk control?’ Instead of using technology to solve a specific problem (like how to
generate a report more rapidly), technology
becomes a much larger influence. It coordinates and facilitates the layers of information within an organization while optimizing
the processes that give a company a competitive edge in the marketplace.
There has to be a conscious choice to
approach technology not just from the
technical viewpoint but also from the
strategic business viewpoint.
What results would you expect to see if a
company moved toward a more holistic
approach to technology?
According to the Business Technology
Management Institute’s ‘Business Technology Convergence Index,’ (a study that
looked at large corporations in 50 industries), the following was determined:
‘Between 2002 and 2006… enterprises
with a more converged business technology management exhibited superior revenue growth and net margins relative to
their industry groups.
- 12 percent average annual revenue
growth versus 4 percent for their industry
groups - 36 percent average annual earnings
per share growth versus 7 percent for their
industry groups - 6 percent higher EBITDA margins than
those delivered by their industry groups’
These results clearly speak to the opportunity in the middle market and to the benefits that come from the intelligent use of
technology.
What do you mean by the ‘intelligent use of
technology’?
It’s more common than you might think
for a company to make a substantial
investment in technology products without taking the time to evaluate what it
really needs. We recommend that before
incorporating new technology, decision-makers lay a strong foundation by formulating strategic objectives and defining
their processes. It’s critical to discover
whether the day-to-day processes in a
company are working for or against that
company’s objectives. Only when objectives are defined and processes are
mapped out can there be a fair evaluation
of how technology might be effectively
utilized in a company.
GREG BOYD is president of MIS Group, www.misgroupusa.com. Reach him at (866) 467-4181 or [email protected].
