Panelist: Dr. Jerry Luftman, Global Institute for IT Management
Interviewer: Dr. Peter Lorange, Lorange Network
Note: There was a limited number of attendees by design, so as to encourage active participation during the interview. There was, however, a large interest for this roundtable, with more than 4,100 views on LinkedIn.
Issue 1: What are the emerging technologies and trends that are having the biggest impact on business?
The list of emerging technology is relatively long, and includes:
Big data/IOT (Internet-of-things)
Cloud Computing
Social/Mobile
Analytics
AI
Robotics Process Automation
3D printing
Blockchain
The digital transformation is bringing profound change to everything we do. Nowhere has this been more apparent than the changes demanded by the pandemic (e.g., working at home, online purchasing, business and social process & communications changes). But the impact on every company began well before and will continue long after the pandemic. The digital effect has been and will continue to drive increased revenues and competitive advantage. The advent of these emerging technologies, and changes to the ecosystem (e.g., competition, interdependent world, sourcing models, politics, natural disasters) has brought intensified attention to IT and digitization, and the evolving role of IT. The abundance of data has a significant impact on our ability to undertake accurate analysis.
Now, there is also technology that facilitates virtual communication, e.g. zoom. The issue of security (cost) may be even more difficult in this new world of working from home!
Issue 2: How can IT help the business generate more revenues?
It is not technology itself that is providing the added value, but how the business leverages technology for competitive advantage that provide business value. In other words, the value of technology comes from how business changes what they do. Businesses must thus take advantage of the new technology to find new clients, develop and sell new products and services, etc., and shift the focus from using technology to lead and survive, towards exploiting it to generate initiatives and thus revenues.
It follows that people from IT and business organizations must work together, have good communication and governance. Processes must be changed to allow for this, i.e. with less so-called silos.
And, while most CEO’s might be concerned about technology and recognize that their companies should be more digital, the organization may not be ready for this – too many silos, IT vs. business! Also, executives are often under-budget for these essential IT and data initiatives. They need clean data, a secure environment, appropriate infrastructure and and a business structure recognizing the need to change. Additionally, management must be sensitive to the culture of IT, and the culture of business, aiming to align the two for better understanding, effectiveness, and efficiency.
(Statement from Peter Lorange: Jim Hagemann Snabe in his book Dreams and Details (2019) confirms this: hardware and software. Snabe is Chairman of both Siemens and A.P. Möller-Maersk. Dreams and Details points out how leadership may solve the most challenging dilemma in business: How do you reinvent an organization from a position of strength.)
Focusing now on the IT side, what must be done to ensure success, i.e. by breaking down silos and by being part of the broader business teams?
Question from Thomas Retzlaff: How can this take place in complex global organizations?
The following factors seem particularly key here:
Communication
Governance, well defined
Delegation– decentralize and centralize!
Regarding the final issue, the following seems to work:
Centralize the CIO function, and with direct report to the CEO.
Federalized/hybrid IT.
Centralized: infrastructure, product nature, computer centers, vendors, data security, data standards, standards, and common systems. Examples: Payroll systems, financial systems
Decentralize: Applications specific to a given business (customer; country)
It may be essential to determine what should report where. The hybrid has proven to be the most effective way to organize; albeit the specifics are fundamental.
Note: Central IT is getting physically smaller (headcount) but strategically more important! And it is the degree of strategic impact that really matters!
Question from Per Lorange: What about crypto currencies when it comes to this?
It is pointed out that crypto currencies, bitcoin and blockchain are not the same. Block chain specifically opens up to the sharing of information, say, regarding personalized health and/or personalized finance. But a problem here is that all providers seem to state that their approach is the best! Regrettably, there does not seem to be enough sharing of best practices.
Issue 3: How will IT be different after the pandemic?
The dominant mode of doing business is likely to evolve back to “face to face” as opposed to work from home. IT shall be different from before the pandemic, however, i.e. becoming more focused on supporting how one might take advantage of new strategic opportunities, i.e. enhance competitiveness. But this shift might also take time, say 10 years.
Question from Per Lorange: What types of stocks (in firms) should one therefore buy?
Stocks in bigger companies or smaller ones?
To buy in smaller companies might have larger potential upside, but it is typically riskier also. But one might now and then be lucky!
Issue 4: What are the most important metrics for assessing IT?
In the ‘old’ days, key metrics related to response time, whether applications were delivered on time, infrastructure productivity improvements, and so on.
What seems to really matter however, is how IT contributes to revenue growth! Does IT support the objectives of the business? And good line executives will typically intuitively “know” whether IT is in line with being able to provide competitive advantage. They see the merits of effective IT. A particular issue for IT might be with respect to this: How fast did I share a particular piece of relevant information (vs. “this is my property”). So the critical process could be: 1) the business case for IT, 2) validation that the benefits were attained, 3) understanding of the why/how it was (or was not) attained, and 4) the sharing of information across the organization.
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