Big Issues Facing Business Technology

In these challenging times it is more than ever crucial to separate the real trends from fads and fashions and to be able to identify the big issues, business agendas and threats and opportunities shaping business – and the IT that underpins these developments. In this article I shall be looking at five of the key ‘big issues’ that we, as business technology consultants, are helping our clients to address.

Accelerating Globalisation
Global integration continues and economies around the world now respond in lockstep to a vast range of localised events and influences. According to a study from Ernst & Young, after a brief pause in 2009, globalisation has increased for the world’s largest economies and is expected to continue expanding. Given the growth projections of developing nations there is mounting pressure on developed economies to compete and even smaller businesses are being forced to reach out to a wider market. Which means revolutionising many IT and operational infrastructures: standardising systems infrastructures, improving global communications and supporting a global workforce with mobile applications.

Technology Driving Disruptions
Every business in every industry is impacted by – as Gartner puts it – the ‘nexus of technology trends’. While this has always been true it now strategic. The tension between legacy and emerging technology is impacting every environment that depends on technology: and that is just about everything, everywhere. As evolving technologies like Cloud Computing, Workforce Mobility, Social Media and Big Data come of age, they are converging to create new matrices of possibilities, challenges and disruptions.

Cloud computing is forcing a rethink of entire corporate technology infrastructures, and posing challenges about the pace and risks involved in this transformation. In terms of creating a new paradigm for business processes, its cannot be understated. However, there is an even biggest trend in play: The democratisation of how content is consumed and IT products and services are procured. For example, business tools like the iPhone and iPad are typically bought by departments, work teams or individual on a ‘BYOD’ (Bring Your Own Device) basis, which are then linked into the corporate data centre, application server, etc.

This increase in smartphones and tablets by a mobile workforce promises higher productivity, but it also creates information security challenges and requires a well-thought out enterprise framework for mobile strategies. No longer will a shortage of requisite skills or the risk of security breaches be an adequate excuse to prevent the development of mobile applications for customers and staff. Workforce mobility is here, like it or not, and it must not only be supported by encouraged.

CIO as BIO: Business Innovation Officer
The call for CIOs and their teams to be more business focused and strategically minded is not new. Today there is a higher than ever percentage of CIOs who are proactively leading the conversation with their business stakeholders around the use of innovative technology to improve processes, creating new revenue streams, improving customer satisfaction and enabling global expansion. In fact, the role of CIO has evolved to the point where a new title is gaining popularity: the ‘Business Innovation Officer’ or BIO.

As we speak, there are several forces bringing this trend to a head. In at least well-managed operations with mature methodologies, internal efficiencies and gains from outsourcing – those areas on which CIOs have traditionally focused – have already peaked. On the other hand, in order to achieve efficiencies and gain competitive edge in the current economic climate, while at the same time creating supportive environments for new working models, CIOs must think like entrepreneurs: they must have a sound knowledge of business processes and objectives, the technology needed to underpin these, and the leadership skills to ensure successful implementation.

The gap in perception between what business thinks the ‘magic bullet’ of technology can achieve and the realities of implementing new applications and transforming infrastructures has historically been one of the CIO’s worst frustrations. It is easy to say: ‘We must move our data centre to the Cloud and reduce IT costs by 25%’. But it is the job of the CIO to balance the opportunities and risks involved in IT budgeting, governance and information security and to be able to elucidate them clearly. At the end of the day the BIO must manage a constructive relationship with the business, pro-actively participate in business planning, define business-inclusive IT governance frameworks and much more.

Outsourcing for Labour Cost Differential
The days of outsourcing to achieve cost savings from wage differentials (outsourced labour being free of staff overheads such as pensions, etc.) are facing, and the trend is a return to insourcing. Yes, overhead, management and governance costs are significant and there is the issue of the local availability of an affordable and flexible workforce. However, this is balanced out by an inadequacy on the part of most outsourcers to demonstrate strategic business capabilities – after all, how can any service provider really be expected to deeply understand an individual business? A typical lack of diversity management (most large outsourcers are fairly monolithic) also makes value maximisation from outsourcing less likely, and in fact is riskier for the business. That said, there are other good reasons to outsource, such as the need to supplement skills, use specialists or to deploy new services and solutions quickly.

Social Media
While this view may fly in the face of popular sentiment, we predict that social media – at least in the B2B arena – will soon begin to face the hard scrutiny of tangible results and will be found wanting. Consequently there will be a flight of the very subscribers that are the driving force of the social media platform. Investments in social media will be questioned, and the results will not stand up to value returned. The argument that social media functions as a vehicle for corporate awareness building and sentiment capturing vehicle may remain valid but not commensurate to the big spend involved. For small and new businesses, it presents a free or low cost entry to a mass marketplace, but will likely disappoint in the end due to its failure to drive business.

Having looked at our top five big issues: Globalisation, Disruptive Technology, the role of the CIO, Outsourcing and Social Media – what conclusions can we draw? We seem to be in the midst of a perfect storm of new global requirements, economic realities, emerging technologies and business transformation. Options proliferate and making sense of them all is far from easy. At the centre of this maelstrom stands the CIO – or BIO – who has never faced a greater set of challenges. But the opportunities, too, have never been greater.

                                                                                                                                                                         Contributor: Navin Anand

Top Ten Global Proficiency Challenges Impeding Growth

There are a few macro arguments for nurturing and mentoring global diversity skills at all levels of leadership and operations management in a corporation. Yet, it does not make immediate sense, lighting up an urgent need on the radar screen. While we can not escape but recognise that the global GDP is shifting axis, as is the global working age population; the world continues to get smaller as globalisation is set to accelerate.

But so what, does it create an imperative for a corporation working well in its local market?

Research points to the need for specific intercultural skills, and conspicuous gaps which may be holding back companies in their quest for success in diverse global markets. There are case studies documenting the experience of companies who do things differently and taste exceptional success in complex emerging markets.

But again, what does this really mean to a small or mid-sized company with maybe a few overseas relationships? Surely focus on quality execution, operational excellence, good management practices should be enough.

Let us try to break it down. Consider a mid-sized company, with no more than a few customers (partners or suppliers) overseas; maybe an outpost operation or two dotting the map; each a lean operation, reporting back into head-quarters. This picture fits millions of companies across the world, particularly in technology, services and outsourcing.

Now consider some of the questions nagging leadership and operations in this scenario. Ignoring clichéd management terminology, wonder how many of these, if any, have kept you awake.

  1. We do need to have a direct presence in this new overseas market, for better understanding, control and growth. But who do we hire and how? Is it better to hire a strong local professional to lead or should we relocate one of our best performers from the domestic operation?
  2. Will we be able to attract the most suitable and meritorious candidates in the local market? If we succeed, will this new hire be able to engage well with the rest of the organization and adjust to the organization culture?
  3. If we relocate a top performer from domestic operations, how much time and what effort will be required to gain insights and understanding of the overseas market? Will it effective in building relationships of trust with potential customers, partners and suppliers?
  4. How will we manage the operation remotely? If the operation becomes too independent will it develop its own unique focus and agenda? Will distance and differing time zones increase operations and management costs?
  5. Will we have the ability to acquire new customers? Can we build relationships of trust and value with prospects, customers and partners?

There are many ambitious companies who struggle with these and similar questions. Equally, companies who are more mature, have bitten the bullet and are beyond the stage of establishing a presence. The challenges and concerns with regard to the front-line operations in their overseas markets have moved on.

  1. We do our best; better than we do in the domestic market, yet our prospects and customers do not seem to trust us?
  2. Why are we overlooked for unexplained reasons in significant bids and decisions? Why does our credibility suffer?
  3. We are expected to perform and be creative, yet we are never invited in helping clients’ identify and debate potential solutions?
  4. We are expected to solve problems, deliver to high standards, work relentlessly and not expect to be paid for the extra effort? Is it worth it?
  5. We are cheaper than the local competition and yet we seem to lose out more often. Are the expectations of the market really fair and viable? Do we really understand the needs of our customers, their imperatives and considerations?

Do any these concerns resonate with your business? Undoubtedly the revenue side impact is the most crucial, but the element of investment and operating costs can be ignored. The opportunity loss, of time and resources, in unremunerative markets can become a disproportionate drain for any company. Such experiences and forays has drained the energy, expense and resolve of many a company pursuing a global growth agenda, particularly in the present economic climate.

There are no pat answers; of course not! Neither is there a single bullet solution. A part of the answer may lie in pieces of the jigsaw – the building of a suitable strategy, developing the best suited go-to-market model, executing it professionally, with the best management teams and practices, supported by locally tuned marketing, sales and relationship building, and so on.

However underlying all these pieces there is a fundamental foundation block. It may be labeled as – global proficiency, cultural intelligence or diversity skills. Its absence can render much of the effort, time and investment ineffective. This proficiency and skill is not about learning up “culture maps” or memorizing the cultural differences of the overseas market. They are more about understanding and appreciating the typical barriers, baggage and perceptions; building a self-awareness and an awareness of others; developing effective communication and most critically, improved judgement. In alien conditions this is the crucial pre-requite to assessing situations, enabling improved problem solving, strategizing and crisis management.

The impact list can be long, abstract and hence usually ignored; left to the common sense and maturity of the individuals on the ground. The pro-active attention and mentoring in this crucial area remains mostly absent, with training and coaching rarely considered. However there are severe costs and penalties. In worst case scenarios there are unexplained order losses, customer exits, rework and waste, team conflict, poor relationship and engagement management, failed alliances, ineffective collaborations, and so on.

After years of multicultural business experience, in a recent meeting, when I was told that “we have had a poor experience dealing with India and Indians”, I was relieved for the direct input. Why? In the majority of situations, such input is surmised, if at all, only after much water has flown under the bridge. You would agree that it is way easier to read the lines than between them, when faced with a tough business challenge.

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Why bother with diversity skills?

The opportunity to get ahead comes wrapped in the challenge. Nothing new then, it always does!

The challenge is both personal and organizational. It is about building cultural proficiency, an intelligence and a skill-set, to thrive in the diversity that surrounds us.

Many terms in our lexicon, such as, remote management, virtual teams, multicultural teams, cross-cultural management, and so on, all have a common root-cause challenge, the diversity amongst us. If only, we could all be alike!

The case for pro-actively addressing this challenge, of building the armour and strengths to thrive in global diversity, is becoming stronger every day, as demonstrated by its brief history.

Consider these arguments:

  1. Diversity is a fact within every large country and continent, be it the United States, Western Europe, India, Canada or Australia. From a few thousand miles it may not appear that way, but market segmentation experts, for votes or pizzas, will tell you about the diversity of their markets. A large enough domestic market does not offer the luxury of ignoring diversity.
  2. The Asian Development Bank projects that the world GDP will shift axis over the next 40 years, with a higher contribution coming from Asian countries. The considerations for such projection are obviously complex and based on several assumptions. However, it is not hard to be convinced of Asia’s increased participation in the world economy with its growing infrastructure, large consumer populations and increasing consumption.
  3. The working age population of the Western economies, Japan and China will decline in the next 20 years, while some countries in Asia and Africa will add another billion people to the global workforce. Obviously there are several implications of this phenomenon the world expects to experience, clearly shifting markets and supply sources, is one such.
  4. Technological changes have impacted our lives significantly in the past 30 years. The rate of technological innovation continues unabated, and the world does continue to shrink. In fact there could well be a common global culture evolving, as researchers study the commonality across our diversity.

The combined impact of these issues is a disruption that we should consider for a minute. The diversity we experience today will accelerate, and, within our own lifetimes. This can present a threat to many, who remain oblivious to the underlying opportunity.

A recent McKinsey survey elicited an overwhelming response that cultural proficiency was a top need for organizations seeking to achieve successful global growth. This is fairly compelling evidence for those who prefer surveys over experiential wisdom.

Let’s address this from the opposite side. What is the threat of inadequate cultural intelligence or diversity skills? This could be long list, but hopefully some of these will strike you as important enough in your situation:

  • Lost business opportunities, customer acquisition and relationship building challenges
  • Unreliable and inadequate supply chain to keep the business competitive
  • Dispersed teams out of sync on critical focus areas, goals, lose empathy and problem solving
  • Unhealthy employee conflict causing loss of productivity, morale and creativity
  • Failed and expensive hiring decisions, supplier relationships, market entries or customer dissatisfaction

In several countries there are statutes and compliance requirements driving inclusion of diversity in business and management. However, the business case for development of the “multi-cultural muscle” is getting stronger. It will increasingly become a critical determinant of success for professionals and companies in the years ahead.