Management Blog and case study

That is the question: should you favour a management approach based on the flexibility of adapting to a series of different business situations, or should you choose an approach centred on optimizing stable and predefined strategic processes?

My latest article, “The Illusion of Performance”, examined the perceptual angle of performance. Shedding light on current management principles can easily break down when the fundamental shifts contributing to a business’s success are revealed.

I will now take you into the perspective of performance, performance as the result of a mechanical approach to management. Methodological performance, which is a part of, but does not necessarily result in, a gradually establishing business success.

A debate was launched in 2003 by Nicholas Carr, editor of the eminent Havard Business Review, with the article “IT Doesn’t Matter”. It should be noted that Mr. Carr based the article on an in-depth analysis in his book entitled “Does IT Matter? Information Technology and the Corrosion of Competitive Advantage”.

My interest here is not to demonstrate or question the rationale of the actual leverage IT has as a tool for corporate growth and development. In fact, I must admit I’m in no position.

I do nonetheless find the idea of asking the question “Does IT Matter?” very intriguing and would like to bring this question into the scope of business situations that favour the emergence of performance through ITs

From this angle, the potential growth incentive, or added leverage potential, I should say, can be assessed based on three analysis profiles:

• The degree of focus on a culture of innovation
• The degree to which IT is incorporated into business processes
• The degree to which business processes have been integrated

These three profiles form an analysis cube that I will call the “IT Potential Cube”. If one were to imagine an assessment of each profile on a scale of 1 to 10, it becomes clear that, depending on the company, the cube can take on a range of shapes and sizes... What is known as a “hexahedra”, to use the correct term.

One can also reason that certain cube shapes are more likely to lead to optimum performance, whereas other shapes should be totally avoided.

In light of the opinions consulted, what is of interest is that it is plausible to assume that a cube that is optimum for a given business is not necessarily optimum for another. Let’s explore a little why by reviewing the key broad principles behind each profile:

Degree of Innovation

The greater the culture of innovation within a business, the greater is the potential for IT to generate performance and sustain growth.

Constant creativity that involves finding an approach to optimize the use of a given technology as it applies to a given business process automatically increases the potential leverage of a technological tool.

Although simple, this awareness is rarely present in projects to introduce technologies. A tool’s most standard features are often implemented without necessarily looking for the “added benefits” to produce a significant positive difference.

Degree of Fusion

The greater IT is integrated, closely merged with business processes, the more likely they are to improve productivity and bolster business performance.

However, any technological change is also likely to cause a slowdown and result in lost productivity because it does disrupt processes.

Degree to Which Processes are Integrated

The degree to which processes are integrated should be adjusted according to a company’s type of activities, more specifically its ability for enlightened strategic adaptation to optimize its business development within the market.

The more processes are automated, based on an assembly-line concept, which is a strategic cost-reduction goal, the more integrating processes is a good option.

The more flexibility and adaptability become the cornerstone of remaining competitive, the more difficult it is to improve gains in productivity once processes have been globally integrated.

Therefore, the optimum degree of process integration has a lot to do with best business practices within a given industry and the management constraints that come with a company’s decision to position a product.

It is also important to note that the final best strategy to be implemented may differ depending on if you are acting on a “micro-operational” level, such as production, or “macro-operational level”, in other words, a broader vision of all company processes. A similar type of vision could, therefore, apply on an operating centre basis.

In conclusion, although a firm commitment to innovation is fertile ground for optimizing ITs within your company, it is essential to constantly review best-operating methods, namely those within your industry, but more importantly, the approaches that contributed to your current longevity.

Then, together with a comprehensive knowledge of the dynamics between your operating centres, all you have to do is determine to what degree your company needs to adapt and the variability of the operations of your key processes to find out which basic elements go into drafting a tailored and optimal IT strategy.