When IT is good for business

Biz-TechThere has been a steady shift over the past decade toward greater alignment of IT processes – and IT spending – with specific business outcomes. Total cost of ownership and return on investment, always viable considerations, have evolved into a more sophisticated view wherein information and communication technology is being distilled into one concept: business technology.

This mega-trend toward the inclusion of all technology into business-centric models is now well-underway, and is being reinforced by a number of phenomena.

First, businesses have to be nimble, and they need the right approach to technology in order to respond to constant change. This may sound obvious, but anyone who lived through the ERP wars of the early 1990s can attest to the fact that occasionally technology, once in place, can lock a business into processes that actually hinder an organization’s adaptive capabilities. The danger is that in today’s world – in which risk profiles are in flux, and in which regulatory and compliance issues require rigorous attention – many companies without adaptive sourcing models will have difficulty keeping up.

Second, outsourcing is now able to play an increasingly sophisticated role in realizing measurable business outcomes, and it is doing so by having nearshoring options in the Americas that can complement those offered in Asia. To achieve this, Service Level Agreements (SLAs) are now being written with an eye to tangible results.

And third, embedded systems are central to an organization’s ability to leverage the potential that’s being driven off the explosion in mobile devices. Without an understanding of how embedded software can get to market in a short timeline, while also addressing security and reliability issues,  a developer is going to get knocked to the kerb pretty quickly.

But this is about more than development cycles. The value being driven off of business technology will be seen in how data can be turned into information, and information into intelligence.  After the wave of BI software acquisitions a few years ago, a lot of the hype around business intelligence died – or at least took new form. Now as the world is being transformed by Big Data, a new discussion is emerging around how to develop and manage the multitude of applications that can deliver actionable data.

This was reflected recently in a report from Technology Business Research, which concluded that by 2015 the market for BI and analytics software will pass $25 billion. This represents an impressive 9% growth rate over the next three years, and is being driven by the large number of organizations that have waited to take advantage of the wealth of information being generated by their employees and customers.

This trend toward a world where all computing technology has business relevance presents a challenge to CIOs. Suddenly, technology’s mandate has shifted from being an enabler of business – albeit with a close eye to privacy and security concerns – to one where it becomes integral to every process, with analytics, including queries and visualization, expected for data driven off of a range of applications.

The good news is that the centrality of technology to business outcomes does not necessarily mean that a business has to ramp up spending. By investing in automation and process innovation, costs can be controlled in a variety of areas, including headcount. Revenue can be generated by investing in process improvements which require a fair assessment of how offshore, nearshore, and onshore labor pools can add business value without driving up costs.

According to Technology Business Research analyst Elizabeth Hedstrom Henlin, the explosion in data across the enterprise “creates headaches for customers and opportunities for innovative vendors”. Automation and smart, cost-effective processes are the way to go. Clearly, those vendors who know how to turn the data explosion into an information revolution by integrating closely with business requirements will thrive, as will their customers.