IT offers an extra dimension

Companies can now use information technology not just to run their business, but to grow it. Roger Trapp reports

An Executive would have to have been on Mars these past few years not to be aware of the Internet. But, according to a US management consultant, many business people are still unaware of the potential of information technology to change their industries.

According to Eric Marcus, vice-president with CSC Index, "the role of information technology has changed totally". Whereas it used to be about automation and the operations part of the business, it is now much more fundamental. "It's no longer just about running the business, it's about growing the business," he said.

His remarks come as KPMG, the firm of accountants and management consultants, released a survey showing that electronic commerce has huge potential, since among companies with turnover of more than pounds 200m it accounts for just 3 per cent of sales.

Mr Marcus's solution is a mixture of "digital business strategies and tactics". Consequently, he calls on companies to develop a vision, acquire competencies and build business models as well as adopt appropriate tactics for prospering in a fast-moving world.

A digital vision can be incorporated into the existing business strategy by envisaging what the business could look like in several years' time if new technologies were applied. As a start, a company could identify areas of business where it is obvious that technologies are being used but in its own case are not. A retailer might be using point-of-sale systems to provide fuller information about sales. But if that approach was to be carried further by applying more complex technologies such as supercomputing and parallel processes, the company could move to "real- time store management" and overtake competitors.

Gaining the right competencies or techniques is not easy and, says Mr Marcus, companies cannot expect to acquire such know-how on their own. He suggests they form partnerships with groups outside the organisation, such as start-up operations or even large companies that may be competitors.

As part of this, he adds, chief executives should evaluate their own information systems teams to see whether they are capable of advancing in this way. If they are, IT specialists should be elevated to the executive level and regarded as "technology leaders and mentors, not support people". In return, IT professionals need to behave as "business partners, not as technologists".

It is necessary to build business models in order to overcome employees' scepticism that the technologies are either too futuristic or not robust enough. CSC says companies should set up centres where staff can try out and comment on developments. In addition, companies need to be aware that introducing systems on a large scale can dramatically change the business.

The consultancy divides the tactics that should be used into five areas - information, partnering, customer service, marketing and management.

In the field of information, companies need to list what they have and ensure that it can be easily located. They also need to realise that the Internet is not the only platform available for transmitting information.

Partnering involves companies recognising that the fall in transaction costs means that they no longer have to be self-contained. It is now more cost-effective to concentrate on "core competencies" and form "value networks" with organisations that can complement their strengths. This will require the development of new skills to co-operate rather than fight with competitors.

Customer service is a key area in which information technology can make an impact. As CSC says, "finding new ways to keep your customers loyal is one of the best investments a business can make". Companies, it adds, "will need to understand their customers' wants, values and desires in cyberspace. They should also use technology to make transactions simpler (and more fun) for customers".

In the marketing arena, organisations will have to counter the erosion of copyright through creating new pricing models, convening on-line focus groups, speeding up promotions and integrating groups of transactions to enable one-stop shopping.

Finally, the most important job for management is to build bridges between the technologists and business people. Moreover, since the business environment is changing so fast, organisations should hire people for their potential rather than their experience. And, related to that, they should recalibrate incentive schemes for employees, customers and shareholders.

In case companies need any convincing, Mr Marcus, who was once a publishing executive, has a few examples. An Internet organisation called Amazon iswidely regarded as the world's largest book retailer despite having no conventional shop. But the most interesting thing about it is not its route to market but its approach to marketing. "It has created an environment that encourages customers to write reviews of the books they read," he says, pointing out that this is essentially adopting the highly valuable word-of-mouth approach to get customers to sell to customers.

Similarly, the parcel service Federal Express has managed to convince customers that shifting control of the process to them in return for no cut in price is a great advance. Meanwhile, Wells Fargo was just a west coast bank until it decided to increase its sales volume by creating its own shopping mall. Though it does not operate all the stores, it benefits by handling all the transactions.

CSC is also seeking to help businesses deal with all this change by organising regular seminars under the name Vanguard. The idea, says Mr Marcus, is to help sponsors - which include 3M, British Airways, BT, Hewlett Packard and Guinness - understand "the most critical emerging information technologies that will have the most significant business impact three to seven years ahead".

An added advantage, he adds, is that the programme's advisory board includes such leading lights of the digital revolution as Nicholas Negroponte, author of Being Digital and computer pioneers Alan Kay and Gordon Bell.

PROMOTED VIDEO
Arts and Entertainment
booksPhotographer Richard Young has been snapping celebrities at play for 40 years - but he says it wasn’t all fun and games...
News
i100
Sport
Aguero - who single-handedly has kept City's Champions League dreams alive - celebrates his dramatic late winner
footballManchester City 3 Bayern Munich 2: Argentine's late hat-rick sees home side snatch vital victory
News
Muhammad Ali pictured in better health in 2006
peopleBut he has enjoyed publicity from his alleged near-death experience
Arts and Entertainment
Tony breaks into Ian Garrett's yacht and makes a shocking discovery
TVReview: Revelations continue to make this drama a tough watch
News
news
News
ebooksNow available in paperback
News
peopleSinger tells The Independent what life is like in rehab in an exclusive video interview
News
The assumption that women are not as competent in leadership positions as men are leads to increased stress in the workplace
science... and it's down to gender stereotypes
Arts and Entertainment
Inner sanctum: Tove Jansson and friends in her studio in 1992
booksWhat was the inspiration for Finland's most famous family?
News
i100
Arts and Entertainment
Singer songwriter Bob Dylan performs on stage
films
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Citifocus Ltd: Product Development - Asset Management

£Attractive: Citifocus Ltd: High calibre individual with significant product d...

Citifocus Ltd: Credit Ratings - Banking Sector

£Negotiable: Citifocus Ltd: Leading global bank seeks experienced credit analy...

Citifocus Ltd: Economic Crime Investigation & Analysis

£Attractive Package: Citifocus Ltd: High calibre individual with a high degree...

Citifocus Ltd: Snr Risk Analyst - Capital & Liquidity

£Attractive: Citifocus Ltd: High calibre individual with superior academics an...

Day In a Page

Homeless Veterans Christmas Appeal: Drifting and forgotten - turning lives around for ex-soldiers

Homeless Veterans Christmas Appeal: Turning lives around for ex-soldiers

Our partner charities help veterans on the brink – and get them back on their feet
Putin’s far-right ambition: Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU

Putin’s far-right ambition

Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU
Tove Jansson's Moominland: What was the inspiration for Finland's most famous family?

Escape to Moominland

What was the inspiration for Finland's most famous family?
Nightclubbing with Richard Young: The story behind his latest book of celebrity photographs

24-Hour party person

Photographer Richard Young has been snapping celebrities at play for 40 years. As his latest book is released, he reveals that it wasn’t all fun and games
Michelle Obama's school dinners: America’s children have a message for the First Lady

A taste for rebellion

US children have started an online protest against Michelle Obama’s drive for healthy school meals by posting photos of their lunches
Colouring books for adults: How the French are going crazy for Crayolas

Colouring books for adults

How the French are going crazy for Crayolas
Jack Thorne's play 'Hope': What would you do as a local politician faced with an impossible choice of cuts?

What would you do as a local politician faced with an impossible choice of cuts?

Playwright Jack Thorne's latest work 'Hope' poses the question to audiences
Ed Harcourt on Romeo Beckham and life as a court composer at Burberry

Call me Ed Mozart

Paloma Faith, Lana del Ray... Romeo Beckham. Ed Harcourt has proved that he can write for them all. But it took a personal crisis to turn him from indie star to writer-for-hire
10 best stocking fillers for foodies

Festive treats: 10 best stocking fillers for foodies

From boozy milk to wasabi, give the food-lover in your life some extra-special, unusual treats to wake up to on Christmas morning
Phil Hughes head injury: He had one weakness – it has come back to haunt him

Phil Hughes had one weakness – it has come back to haunt him

Prolific opener had world at his feet until Harmison and Flintoff bounced him
'I have an age of attraction that starts as low as four': How do you deal with a paedophile who has never committed a crime?

'I am a paedophile'

Is our approach to sex offenders helping to create more victims?
How bad do you have to be to lose a Home Office contract?

How bad do you have to be to lose a Home Office contract?

Serco given Yarl’s Wood immigration contract despite ‘vast failings’
Green Party on the march in Bristol: From a lost deposit to victory

From a lost deposit to victory

Green Party on the march in Bristol
Putting the grot right into Santa's grotto

Winter blunderlands

Putting the grot into grotto
'It just came to us, why not do it naked?' London's first nude free runner captured in breathtaking images across capital

'It just came to us, why not do it naked?'

London's first nude free runner captured in breathtaking images across capital