It's May and we are approaching the middle of the year. Business is booming right across Asia-Pacific. The world economies are in constant movement, with consolidation and expansion rampant across much of Asia. Nearly every industry is moving forward despite rumors of a potential slowdown in the world's largest economy -- the US. The world doesn't appear too concerned. Instead business managers are busy scheming to expand territories and searching for partners.
Enterprise Innovation surveyed its readers in March 2007 to identify what the business and technology concerns are for the year. Some of the responses took us by surprise. Others affirmed our long-held belief that we are in the right course -- IT has one overarching goal (and it is not to support business). Technology is finally catching up with business and the IT organization finally realizing its real purpose is not to serve the business, but to lead with it.
Business challenges and priorities Best remembered as the father of modern management, Peter Drucker wrote that "there is only one valid definition of a business purpose: to create a customer. He went on to say "Businesses are not paid to reform customers, they are paid to satisfy customers."
Asia-Pacific is gearing up for competition in an increasingly global economy. And regardless what business you are in, all 618 respondents to Enterprise Innovation's survey agree that the customer remains the focus of attention with over 49 percent of responses believing that improving customer service delivery is of the highest priority (refer to Table 1).
"The degree of product differentiation is thinning these days and brand loyalty is harder to achieve with influx of numerous brands. Service is what differentiates leaders from laggards," says Lynette Low, Manager for Customer Delight Management, Canon Singapore. "People remember an experience and this is largely created when they interact with the people behind the brand. No matter how much one is impressed by an advertisement, it the final experience is bad, all good impressions generated from advertisements and public relations efforts are lost."
In this case the 'customer' is not just existing customers but the competition's customers as well. Business executives are diligently looking for every possible opportunity to turn a competitor's customer over to them even as they look for ways to protect their own customer base (and milk them for new opportunities -- also called cross-selling).
"Companies are all pretty familiar with the tiered approach for winning and keeping customers by moving them up the value chain, incrementally, through value added services. True service personalization comes when companies are able to rapidly configure and deliver hundreds of these smaller services -- at which point the value add becomes the service," says Gareth Senior, CEO and CTO for Axiom Systems.
To achieve both goals require companies to implement changes in the way they do business (42.0 percent). To achieve its top three priorities, management is under extreme pressure to come up with innovative new products and services (33.6 percent) and improve workforce productivity (28.1 percent).
While profitability remains a priority for many businesses, cost cutting plays a low 27.9 percent to businesses priorities -- sixth in importance among business and technology objectives. This lends credence to management understanding that cost is no longer a competitive advantage and must play a secondary role to generating new business.
Business continuity is still important (27.9 percent) for many businesses particularly those open in disaster prone markets such as Taiwan, Japan, and Indonesia. This also applies to markets like Thailand and the Philippines where disruption to business may come in the form of political or economic uncertainties. And as the cable disruption disaster that occurred in Taiwan in December 2006 shows, disruption in one market will impact those operating in other geographies.
Workforce collaboration is deemed less important than cost cutting and minimizing business disruption. This reflects market observation that many companies are unfamiliar with collaborative tools (more so than their Western counterparts). Asian businesses are inclined to invest in technology or processes that are new and unproven. Asia's business managers often take a wait-and-see approach in introducing solutions that may are seen as untested (particularly among their local peers).
IT management priorities are shifting
This is a recurring priority among senior IT executives that trickles down throughout the organization. CIOs are pressed to improve the performance and capabilities of the entire team (66.6 percent). Refer to Table 2.
"High-touch businesses have to adopt a number of technologies, and in some instances change the way they do things, to be able to respond faster to market. This may involve re-architecting the company's infrastructure so that customer service response is the same regardless of where the transaction takes place," says PK Lim, Managing Director, ASEAN / ANZ, Blue Coat Systems.
The CIO and his direct reports are also driven to meet the overall imperative of aligning IT with business objectives. The good news is that successful IT teams have shown this is possible. The bad news is that it requires a change in mindset as well as willingness to learn, adapt and be humble enough to accept other people's opinions.
Ann Livermore, executive vice president for the Technology Solutions Group at HP notes that "IT as we know it is over. The new reality is that technology doesn't just support the business -- technology powers the business and helps drive growth. The shift to business technology enables CIOs to weigh and measure their investments in terms of business outcomes -- whether it's managing risk, accelerating growth or lowering costs."
Companies are also more inclined to spend on technology and implement operational change (35 percent) if it means becoming more agile (nimble) and responsive to changes in the business environment.
Faced with the difficulty of identifying, hiring and retaining qualified staff, IT managers are more than happy to outsource non-strategic elements or work that can easily be outsourced without comprise to security and in-line with keeping costs down.
Technologies on high priority
Over 55 percent of survey respondents say that security (and continuity) remains the number one concern within the IT organization. (Refer to Table 3). Security-related spending is a mainstay of annual IT budgets with some companies now outsourcing their IT security needs to specialists.
As businesses adopt mobile technology to get closer to their customers, this exposes the inadequacies of present-day security policies and strategies to hostile elements. Ken Low, Security Marketing Director at TippingPoint observes that even as companies (of all sizes) grow in reliance on their networks, many aren't proactively doing something to improve their network security. "In a Gartner survey 60 percent of companies admit they don't have adequate security in their wireless environment. Add to this the widespread adoption of wireless connectivity options offered by a multitude of mobile devices, and the biggest threat might very well be your own employee, or even employees working in companies around you. This is just one tiny aspect of network security. If you consider the sophistication and velocity of malware and security threats out there that haven't been properly provisioned against, you will begin to realize how dire the situation can get, whether you're a large enterprise or an SMB," Low adds.
Greatest contributors to business
Present day business environments call for IT to get off its cost-center mentality and lead the way in identifying new opportunities. Among the best run organizations, IT staff are required to relocate to specific business units they are assigned to. In so doing, they become part of the business unit, and part of the team that draws and execute new products and services.
"Technology is an important differentiator in today's competitive business environment. New technologies enable businesses to stay competitive and venture into new markets while enabling innovation and resulting in improved productivity," says Kishore Kapoor, CEO, i-flex Solutions in Singapore.
Over 40 percent of respondents believe that business process management (BPM) is a strategic initiative in 2007 (see Table 4). Gartner points to the CIO as the person to take charge and be accountable for BPM related exercises.
According to Janelle Hill, research vice-president at Gartner "BPM wins the 'triple crown' of saving money, saving time and adding value. BPM is delivering both short-term ROI and long-term value. One example is an insurance company that was able to reduce its claims processing cost by more than 20 percent. We are currently seeing uptake in BPMS use and benefits in government, banking, healthcare, transportation and travel industries."
One man's security is another man's opportunity. Companies are not just investing in security they are telling customers that their security is very important. Customers are more inclined to do business with companies that take security very seriously.
According to Nick Small, Regional Director, Unisys Public Sector, Asia South: "Information security has over the past years transformed from being an internal issue, primarily localized to the IT Department, to a business priority and an opportunity for differentiation. In many industries sound information security has become a key marketing tool -- demonstrating to customers a commitment to securing their information and assets. But as information security improves, so do the capabilities of those that seek to overcome it. It is essential that information security solutions are continuously refreshed to address emerging threats and vulnerabilities -- thereby demonstrating to customers that they are protected."
A company's intellectual capital is still the least utilized asset within a company. Tapping this knowledge pool continues to be the subject of heated discussion as to industry best practices. Over 39% of senior executives participating in this survey understand the power that knowledge brings to the business and have prioritized it as such. Investments in business intelligence (BI) and data mining remain a continuing priority.
"Operational systems (such as ERP software) allow you to do things faster, while the BI solutions help you to think faster. Combining the two allows users to do, think and consequently act faster," said Chart Chai Chayavirabood, Director of Information Management at Avanade Asia.
Drucker warns that many organizations will continue to fail in this arena so long as the responsibility for how BI tools usage remain in the hands of the IT organization. "Most CEOs still believe that it is the job of the CIO to identify what information the CEO requires. This is a fallacy. The CIO is a tool maker. The CEO is the tool user," argues Drucker.
The survey shows that different companies have different priorities reflecting the varied interests in the types of technologies being considered, invested in, and deployed. What is clear is that technology is an integral element of the business operation and that IT is expected to not only solve crucial business problems but help identify and deliver innovative products and services. The company's survival depends on the successful integration and alignment of IT into the business.
Editor's note: For a complete list of the survey results, send your request to editor@enterpriseinnovation.net with the subject "2007 User Wants and Needs Survey".
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