McKinsey has increased its focus on technology and IT as a strategic force, which is a good thing and reflects the changing dynamic related to information, technology and their contribution to the enterprise. As part of that move, they have updated their technology enabled business trends in a recent article. Link to McKinsey Article: http://bit.ly/aJ4Z37
CIOs and IT executives need to be aware of and understand these trends from McKinsey’s point of view given the company’s reach and influence in the senior executive community. The trends, summarized below, do come from a management consulting perspective and therefore may not be immediately recognizable to a technologist. The trends are found in the McKinsey article, the summaries are a translation from the article into terms and concepts that are more prevalent in the technology and IT community. Any errors or omissions in translation are my own.
- Distributed Cocreation move Mainstream – a way of thinking about social media, particularly the consumer/customer side of social media aka Web 2.0. The report mentions collaborative efforts at P&G, Facebook, and others. The importance of this trend and its placement as the first in the list seems to be based on the fact that there are not tens of millions of people using social networking sites.
- Making the Network Organization – this is a discussion about how to span organizational and functional boundaries in a company, predominantly around gaining access to the best talent and skills. The network, in this context, is organizational and social – reaching beyond the company’s walls and into an extended value chain. The trend is not particularly tech centric in its description, but you can see how Tech plays a role (social media/email/collaboration tools) can make this happen
- Collaboration at Scale – concentrating on knowledge work and collaboration across boundaries and groups is important and increasingly critical. This trend points out that technology alone will not drive greater collaboration, but that there needs to be a better understanding of how knowledge work takes place.
- The Growing “Internet of Things” – described as a continuation of a prior trend in terms of ‘expanding information systems.’ This is a version of the whole, smart and networked objects technology argument, resting on RFID and Telematics as ways of changing the flow of information and its use in processes, etc.
- Experimentation and Big Data – captures the use of advanced analytics and its use in experimentation at the customer interface. Technically speaking this trend will call for business intelligence (BI) and Analytics at scale and across enterprise processes. Tying information to experimentation as a way to drive innovation is another focus of this trend.
- Wiring for a Sustainable World – looks at the issue of environmental impact and sustainability. The trend sees IT in two ways, first as a source of emissions and power consumption and second as a means to increase sustainability through things like smart grids. Using technology for sustainable growth.
- Imagining Anything as a Service – is McKinsey’s positioning of technologies such as cloud computing and software as a service (SaaS). The model of service here is thought of as units companies can purchase ‘by the drink’. The trend points to ZipCar as a point that services are not all information or technology based.
- The Age of the Multisided Business Model – is a revised version of the idea that companies play multiple roles in a value network – provider in one role, customer in another, that kind of thing. The multisided business model is driven off web technologies and services where you have the ability to be both a customer and a supplier in the same transaction. This trend is also linked back to trends Making the Network Organization and Collaboration at Scale.
- Innovation at the Bottom of the Pyramid – recognizes the opportunities in emerging markets. This is really McKinsey’s version of CK Prahalad’s last and very influential book. This will become a critical issue as companies look for growth outside of their home markets and customer segments.
- Producing Public Good on the Grid – recognizing the role of technology in creating and providing public goods. This trend includes eGovernment or Government 2.0 as well as infrastructure and ‘smarter’ cities. This one is highly connected with “Wiring for a Sustain World”
Any or all of these trends may show up in your business strategy or be asked about as you formulate your 2011 plans. As you read these summaries you can see significant similarities between the trends – they are all about connections.
I have done a quick analysis of the trends and their interconnections, shown in a relationship map below. The lines measure the major connections, I am sure that there are many more, but these are the ones that stood out to me.
For CIOs and IT professionals, one thing about these trends becomes clear. They are all based on the information and communications capabilities of technology rather than IT’s transaction processing or computational power. These are IT’s traditional core strengths – strengths that do not appear as forces behind in these trends. This may reflect a changing attitude of business to what we normally think of as IT.
Given all the media attention to social media and the prevalence of social media in these technology enabled business trends, its entirely possible that business executives would be more interested in how IT connects people rather than how it conducts business transactions. That does not change IT’s fundamentals as much as how business executives perceive the future value of technology in their strategies and business models.
More on that in latter posts.
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