taking care of 'the business
TRANSCRIPT
“IT’S THE ECONOMY, STUPID”
Source: Clinton Election Campaign 1992; Intergenerational Report 2002, Treasury/Ken Henry
Population, Participation, Productivity
INDUSTRY SECTORSAustralia and NZ Standard Industrial Classification SectorA — Agriculture, forestry, fishing and hunting
PrimaryB — MiningC — Manufacturing
SecondaryD — Electricity, gas and water supplyE — ConstructionF — Wholesale tradeG — Retail trade
Tertiary
H — Accommodation, cafes and restaurantsI — Transport and storageJ — Communication servicesK — Finance and insuranceL — Property and business servicesM — Government administration and defence
‘Quarternary’N — EducationO — Health and community servicesP — Cultural and recreational services
‘Quinary’Q — Personal and other services
Source: 1292.0 ANZSIC 2006, Australian Bureau of Statistics
A HUGE IMPACT ON (FROM!) MOST OF US
Source: Digital Disruption – Short Fuse, Big Bang, Deloitte, 2012
Political
Economic
Social
Technology
Legal
Environ-mental
Existing Compet-
ition
New Entrants
Buyer Power
SubstituteProducts
Supplier Power
MANY SOURCES OF ONGOING TURBULENCE
Source: PEST(LE) Analysis, ???; Competitive Forces, Porter, 1979
THE SAME BASIC STRUCTURE/FUNCTIONS,REGARDLESS OF SIZE/INDUSTRY
Source: Competitive Advantage, Porter, 1985
WITH THE SAME BASIC GROWTH STRATEGIES
Market Penetration
(Existing Product, Existing Markets)
New Product Development
(New Product, Existing Market)
Market Development
(Existing Product, New Market)
Diversification
(New Product, New Market)
Source: Corporate Strategy, Ansoff, 1965
AND THE SAME BASIC TACTICS
Increase Sales
Market Penetration
Grow the Market / Increase Usage
Win Competitors Customers
Win New Buyers / Repeat Purchasers
New Product Development
Extend Product Line (Up/Down/Side)
Market development
Convert non-users
Enter new segments
Enter new geographies
Related Diversification
Develop new products for new related markets
Source: Adapted from ‘Products and Strategies’, Brownlie, 1985
Reduce Costs
Improve Productivity
Outsource Operations
Reduce Investment Base
Redeployment of Capital
Innovation, Divestment, Unrelate Diversification
INFLUENCED BY TYPE OF PURCHASE
Low Involvement, Informational
(Detergent, Fuel, Credit Cards, Pet
Care, Basic Foods)
Low Risk, Commodity
Low Involvement, Transformational
(Snacks, Soft Drinks, Fast Food, TV Shows,
Computer Games)
Low Risk, Self Expression
High Involvement, Informational
(Whitegoods, Loans, Insurance, Advice,
Computers, Medical)
High Risk, ‘Commodity’
High Involvement, Transformational
(Fashion Clothing, Cars, Motorcycles,
Cosmetics, Holidays)
High Risk, Self Expression
Source: Marketing Communications, Rossiter et al, 2005
AND DISTRIBUTION CHANNEL EMPLOYED
• Business to Consumer (B2C)– Producer → Consumer– Producer → Retailer → Consumer– Producer → Wholesaler → Retailer → Consumer– Producer → Agent → Wholesaler → Retailer → Consumer
• Business to Business (B2B)– Producer → Industrial User– Producer → Industrial Distributer → Industrial User– Producer → Agent → Industrial User– Producer → Agent → Industrial Distributor → Industrial User
• Services– Service Provider → End User– Service Provider → Agent/Broker → End User– Service Provider → Retailer → End User
Source: Strategic Marketing, Reed, 2010
AND UNDERPINNED BY FUNDAMENTALLY THESAME TECHNOLOGIES
Source: Adapted from Ovum’s ‘IT Reference Model’, Ovum, 2012
NO ORGANISATION IS AN ISLAND
Company
CustomersCollaborators
Source: The 5C Extensions to ‘Mind of the Strategist’, Ohmae, 1991
Value
AND CALLING FOR A HOLISTIC VIEW OFTECHNOLOGY ALIGNMENT
Source: Microsoft Business Architecture, Microsoft, 2006+
Business Architecture Solution Architecture
Software Architecture
InformationArchitecture / Interaction
Design
DataArchitecture
/ Domain Design
ApplicationArchitecture / Functional
Design
Infrastructure Architecture
Security Architecture
Every single piece (in both worlds) needs to be alignedand moving in the right direction!
NO TECHNOLOGY IS ‘STRATEGIC’
Source: Drivers of Cloud Adoption Survey, Host Analytics/Dimensional Research, 2012
“IT did not need to be involved in the purchasing
decision”
REALLY JUST REMOVING COMPETITIVE DISADVANTAGE
Source: Drivers of Cloud Adoption Survey, Host Analytics/Dimensional Research, 2012
Upgraded 2 Years Ago54%
Upgraded 3 Years Ago32%
Upgraded 4 Or More Years Ago - 14%
DIGITAL STRATEGY –EVERYTHING OLD IS NEW AGAIN!
Source: Digital Disruption – Short Fuse, Big Bang, Deloitte, 2012
Umm… invest in customer channels and analytics/intelligence
Err… move all supporting functions and systems into the
cloud or offshore
SO WHAT?• A Matter of Perspective
– It’s never been easier for new entrants to scale up
– Incumbents have never been so entrenched in legacy
• Custom ‘Commodities’ Hinder, not Help– Bespoke operations are now rarely a competitive
advantage – customers tend not to care about nuance.
– Most businesses care more about agility than costs.
• Differentiation and competitive advantage now tends to be based in connected supply chains and effective market channels– Not ‘traditional IT’ for the ‘back office’
– The internet has only accelerated this trend
SO WHAT?• IT is critical for modern businesses, but in a different way
to where the focus has been previously– Organisations will quickly become either ‘Yesterday’s Heroes’,
‘The Survivors’, or ‘The Value Masters’
• To not only survive, but to truly create customer value, we must architect systems for engagement and collaboration– With both Partners and Customers– In ‘real-time’ wherever possible– Think Federated Identity, Cloud Service Bus, SaaS back-office
apps, etc– If you don’t, guaranteed another organisation will…
• You probably know how technology can deliver value better than your boss or ‘the business’ does– Probably just need to express things in a business context– In a software vendor or consultancy, it is double the fun
RECOMMENDED READING
• Positioning: The Battle For Your Mind (1981)• Getting To Yes (1981)• What They Don’t Teach You At Harvard Business School (1984)• Influence: The Psychology of Persuasion (1984)• The Fifth Discipline (1990)• Leading Change (1996)• The Innovator’s Dilemma (1997)• The Tipping Point (2000)• Blue Ocean Strategy (2005)• The World Is Flat (2005)• Reinventing Project Management (2007)• Business Model Generation (2010)• Great By Choice (2011)