Outlook Special Edition, May 2004
For any organization seeking to achieve high performance, the role of information technology has never been more vital. The extraordinary abundance and easy accessibility of information mean that its very nature is changing. The tools and technologies used today to gather and share information are contributing to an ever-expanding list of new uses for information, in both business and government. Meanwhile, increasingly advanced, cheaper computing power and data storage have simplified the management of this avalanche of words, numbers and images.
These forces have combined to give companies an unprecedented opportunity to use IT to create business value, the ultimate standard for measuring high performance. For most companies, this will involve three steps: reassessing their information technology plan and approaches; investing carefully to support their IT plan; and mastering the capabilities needed to realize that plan.
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A high-performance IT plan involves managing far more than traditional business data derived from enterprise resource systems. Today, corporations also have access to information from real-world observations, made possible by the growing prevalence of RFID tags, sensors, web cameras and GPS, as well as information from shared data banks and the Internet. And, thanks to the advancement of wireless and mobile technologies that tap and share information, ubiquitous access is a near reality. This means information is coming from beyond the firewall, in quantities never before experienced.
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Finally, an IT plan must accommodate the crucial need for speed. Business today operates at a frenetic pace, with transactions—and decisions—essentially being made in real time. The technology that makes information available to decision makers needs to be streamlined and flexible. This way, it can connect the many diverse participants in information sharing both inside and outside the organization, handle the demands of this new business environment, and be adaptable as conditions change and opportunities arise.
What is the business value of putting all this information to use more effectively, more rapidly and, above all, more strategically?
Consider the immediate opportunities for a major improvement in productivity, particularly in information-based industries. In the United States, the contribution to growth in gross domestic product was roughly equal for the manufacturing and service sectors from 2000 to 2002—yet information-based industries require nearly three times as many workers. As a result, annual corporate profit per worker averages about $13,000 in manufacturing but only about $2,000 in the service sector. That huge difference in productivity is a business opportunity that organizations can unlock by using technology to increase worker productivity through the more efficient sharing and use of information.
Companies seeking to become high performers should aspire to nothing less than their own information revolution. IT makes it possible to achieve in information-based industries what business has already achieved in manufacturing: the smooth and efficient delivery of products, created using standardized processes that incorporate the best and most efficient talent worldwide.
As organizations expand their information networks and integrate their hardware and software systems, it becomes possible to deploy work around the globe, broadly share expertise and perform as global teams. The combination of flexibility and efficiency achieved globally is a key element in high performance.
The short-term business potential is clear. Just as important, Accenture believes that information technology is the most fertile ground for innovation that can drive long-term value. As technology advances, it opens up new possibilities that innovative organizations will exploit for competitive advantage. In any industry, whether service or manufacturing, better products and services come through in-depth knowledge of the customer and through providing products rich in context—and, therefore, of real value to the user. This is equally true for governments.
Strategic Investing
To capture the business value of information technology, organizations need to move beyond seeing IT narrowly as a function whose most important consideration is cost control. Instead, they should adopt a strategic approach to IT investments that are likely to yield better returns more quickly than in the past.
This is true, in part, because the technology itself is reaching a level of maturity that makes investment productive. And costs have come down as suppliers have cut prices; tools and methods for developing, integrating and maintaining systems have improved; and high-quality technology labor has become available globally.
Equally important, many companies have already sown the seeds for this revolution by putting into place much of the necessary infrastructure and capabilities, which they can build upon to achieve significant business value and competitive advantage for a relatively modest incremental investment. With the judicious consolidation of existing systems and well-planned investment decisions, an organization can be in prime position to take full advantage of information technology on a continuing basis.
This Outlook Special Edition will explore the relationship between high performance and information technology, with a special focus on the central skills to be mastered. It will look at the interrelated areas of infrastructure and integration, which together create the IT backbone. It will also look at the opportunities that come from taking a new approach to information technology management, one that is based on the principles of industrialization, with a focus on metrics to drive down cycle time, increase predictability, reduce rework and defects, and fully leverage global sourcing. And it will explore the role of information technology in delivering the innovation that fuels growth.
While each facet—infrastructure, integration, industrialization and innovation—will be discussed separately, they are clearly interconnected. Indeed, it is only in combination that they create value. By working simultaneously to master these four facets, organizations will be able to deploy information technology most effectively to deliver business value and achieve high performance.
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