Archive for the ‘Innovation’ Category

Using data for productivity and profit   Leave a comment

When thinking about how to improve your use of data in your organisation there are two important starting points.

First, reflect on the two halves of your business, not-for-profit or government body. One half is the operations side, the other is the value creation side. The focus of your operational side is how to get things done better, cheaper and faster. Improvements on the value creation side are about making what you do that is distinctive, better.

Second, consider Porter’s value chain. That set of activities you perform to turn your inputs into outputs and that set of secondary tasks that support those primary activities.

So, where does your use of data for improving productivity and profit come in?

And how do these two starting points come into the equation.

Consider your operational half using some aspects of the value chain. Do you know how efficient your input transformation process is? How much time lag is there between steps? What is the error rate? What of wastage, breakdowns, and the like? Do you have real-time-data-visibility into this aspect of your organisation?

And consider your value creation side, again using some aspects of the value chain. How good are the buyer-facing links in the chain (ie. sales, service, marketing) at asking questions and collecting data? Are you tracking usage of your goods and/or services for insights into improving your value creation activities?

For once you start collecting this data, you will be able to analyse for trends and patterns (ie. cluster analysis: groups of records, anomaly detection: unusual actions, and rule associations: dependencies) which will result in ideas to improve both your productivity and your profitability.

For more of what I have to offer, visit Dellium Advisory, follow on Twitter, connect using LinkedIn, review my strategy and futures-centric blog, or subscribe to my YouTube channel.


Porter’s 5 Forces and Information Technology   Leave a comment

Let’s start with defining Porter’s Five Forces.

Michael Porter’s framework for analysing an industry’s competitiveness and for developing business strategy is commonly called “Porter’s Five Forces”.

And these 5 forces are:

  1. the threat of new entrants
  2. the threat of substitutes
  3. the bargaining power of suppliers
  4. the bargaining power of buyers
  5. the intensity of industry rivalry

To explain, let’s use the example of a corner pizza shop. With respect to the threat of new entrants, how easy is it for another pizza shop to open up just down the road? With respect to the threat of substitutes, if we see pizza as a take-away food what other products can substitute as take-away food? With respect to the bargaining power of suppliers, how much influence does say the landlord, those giving permission for the shop to setup, and the pizza ingredient suppliers have with the pizza shop owner? With respect to the bargaining power of buyers, how much influence do the pizza shop customers have? Are they loyal, can they handle price changes? And finally, with respect to industry rivalry how intense is the competition? How much advertising needs to be done, what does it take to remain sustainably competitive, how many competitors are in the market?

You can see from this list of five forces that information technology can play a significant part in each.

New entrants: Improving productivity and reducing costs are one focus of IT. But what about applying IT to the task of gathering competitor intelligence through the analysis of social media and news alerts?

Substitutes: What actually makes your product unique? Can IT be used to make it even more so? Again through collection and analysis of market intelligence can you strengthen your product’s position in the market?

Suppliers: Are you easy to deal with? Can you configure your IT systems so that you have a better level of integration with your suppliers? Do these same IT systems allow you to pay your creditors before time?

Buyers: Well, we all know who are customers are. But, can they easily complete that transaction? Do you analyse the gold that is your customer database and transaction history to shift the balance of power more in your favour?

Rivalry: Sustainable competitive advantage. Its the mantra for staying afloat and staying ahead in a competitive market. But are you smart with respect to your operational systems? Are you investing effectively when it comes to the production of profit?

There we have it. In summary, your IT systems are a critical resource when it comes to developing your business strategy, and they are a critical component in the analysis of your business environment. The effective and efficient use of Information Technology is a key resource in influencing the effect that each of Porter’s five forces has on your business.

For more of what I have to offer, visit Dellium Advisory, follow on Twitter, connect using LinkedIn, or review my strategy and futures-centric blog.

Posted March 14, 2016 by terop in Business Strategy, ICT Strategy, Innovation

Critical Thinking and IT   Leave a comment

Having been involved in IT for quite a number of years I have been personally across an extensive list of faults, projects and to-do lists. Where the faults have ranged all the way from printing problems on a PC to Active Directory synchronization errors across multiple global domains. Where the projects have included things like office relocations, SAN upgrades and WiFi rollouts. And where to-do lists (IT strategies) have revolved around understanding the needs of multiple stakeholders, the timing of investment decisions and the availability of resources.

And one of the critical abilities that is common to all of these is the ability to think critically.

Not in the sense of being critical about others, but the process of thought and reasoning.

I’ve seen fellow IT professionals simply content to hit refresh buttons and just go for the software re-install.

I’ve seen projects fall over because some first and second order impacts weren’t considered.

And I’ve seen action items added to strategies for no other reason than it just felt right to the sponsor.


So, while the following list can apply to other areas of endeavor that requires fault analysis, project management or strategic approaches, all of these aspects of critical thinking do apply to the full gamut of activities associated with information technology.

Eight principles of critical thinking:

  1. define the purpose
  2. what is the question you are wanting to answer
  3. collect information
  4. consider your inferences
  5. check your assumptions
  6. be clear about the concepts in use
  7. what exactly is your perspective
  8. what are the implications

Regarding purpose. What is the objective of that project? What is it that is really trying to be achieved?

Regarding question. How clear are you about the fault you are trying to fix? What are its symptons and underlying causes?

Regarding information. Do you have all the facts and evidence with respect to that fault? How long has it been going on, under what conditions is it triggered, and so on.

Regarding inferences. Looking at that set of strategic objectives, what interpretations and conclusions can you draw out from that body of proposed work?

Regarding assumptions. What beliefs and biases do you hold, and what beliefs and biases do you believe that others hold?

Regarding assumptions. With respect to that project, what are you taking for granted? With respect to that strategy, what are you assuming about the business?

Regarding concepts. What exactly is that idea you have about the cause of that fault? What is the theory you have about the use of that particular technology for that project?

Regarding perspective. Can you step back and see your point of view dispassionately? In the project management discussions, is your point of view valid?

Regarding implications. When you take that step to fix up the fault, what will happen? What is likely to occur as you execute that strategy?

The ability to think critically is increasingly important. Do you take the time and effort to apply any or all of these eight aspects of thought and reasoning to the tasks at hand?

For more of what I have to offer, visit Dellium Advisory, follow on Twitter, connect using LinkedIn, or review my strategy and futures-centric blog.

How wise is your organisation?   Leave a comment

If wisdom can be defined as knowledge in action, on what are you basing your actions? How thorough, even relevant, is the knowledge you have?

How well do you know your markets, your employees and your competitors? How well do you know the systems in place in your business or not-for-profit? Do you know their efficiency or their effectiveness? Are you relying upon gut feel, what people are telling you, or do you have empirical evidence to back things up?

For the better knowledge you have, the better decisions you will make. All leading to a reputation of wisdom.

Where you are known for making right judgements.

And in this information-rich milieu, where the cost of collecting and analysing that information is forever falling, the question is – are you taking advantage of your data resources?

Are you, if you will, fully exploiting the “low-hanging data fruit” in your organisation?

Let’s say you are manufacturing widgets. Let’s assume that a rich stream of data is available from each point in that transformation process, surely the cost of storing that data is negligible! And what about the calculations on that data? Think of the improvements that could be made by looking at the relationships between the data streams from various points in the transformation process.

Let’s say you are dealing with information. Let’s assume that what is produced, ie reports/recommendations/decisions is dependent upon other sources of information. How easy is it to find the right data in those other sources of information? Surely the cost of automatically extracting that data is much less than the manual cost of extracting it? Think of the quality improvements that would flow into that set of reports/recommendations/decisions.

With the manufacturing industry example, the low-hanging data fruit is process efficiency. With the service industry example, the low-hanging data fruit is also process efficiency. The former is data collection that leads to performance improvement. With the latter, its data presentation that leads to performance improvement. And where the resulting knowledge from performance improvement leads to wiser outcomes.

The key point here is that we must reframe our approach to information. We must think critically about how we use the data we have.

For judgements that are more right will follow.


For more of what I have to offer, visit Dellium Advisory, follow on Twitter, connect using LinkedIn, or review my strategy and futures-centric blog.

Information Technology and Sustainable Competitive Advantage   Leave a comment

How does information technology help you sustain your competitive advantage?

Is it just a matter of simply just getting the latest smartphone and apps? Or ensuring that your staff have the latest laptops and fastest internet connection? What about the cloud, and moving your data and applications to a completely web-based scenario?

These are important, but there is so much more to consider.

For IT should be there to support the business, not the other way around. IT is a service, a service to help the organisation achieve its goals. And to achieve long term success, those goals should be framed with sustainable competitive advantage in mind. And sustainable competitive advantage is built upon what you do with what you have. Therefore the question is: how well are you using the resources and capabilities at your disposal?

One way of thinking about sustainable competitive advantage is the VRIO model. Where V stands for value, R for rare, I for imitable and O for organisation. So, what do you have that is of value? And does this value enable you to compete in your market? The second layer is rarity. How rare is that resource/capability? Third is imitable. You may have something of value, and it may be somewhat rare, but how easy is it to copy? Perhaps a technology, a process, or the people you have. How easy is it for your competitors to imitate what you do or have? And finally, organisation. How well are you organised to take advantage of what you have?

And this is where information technology comes in. For IT is about information. It’s about the technology you use to support the flow of information throughout your organisation.

Pardon the pun, but IT helps you organise your organisation!

Think about all the different parts of your for-profit or not-for-profit organisation. Think about the operational departments, the sales and marketing people, the product support team, and so on. How well is information flowing between them? How easy is it for the people in each of those sections to get hold of the information they need to do their jobs? Who uses their information outputs, and what do they do with that information.

So we can see that there is a direct link between sustainable competitive advantage and the information technology you employ.

Information Technology helps you to take advantage of the valuable, rare and imitable resources and capabilities at your disposal.
For more of what I have to offer, visit Dellium Advisory, follow on Twitter, connect using LinkedIn, or review my strategy and futures-centric blog.

Posted November 2, 2015 by terop in Futures, ICT Strategy, Innovation, Technologies

Improving Workplace Productivity   Leave a comment

A recent study by the New Zealand Ministry of Business, Innovation and Employment noted, that there are several factors to consider where management’s aim is to improve workplace productivity. They found the following drivers:

1. Building leadership and management capability
2. Creating productive workplace cultures
3. Encouraging innovation and the use of technology
4. Investing in people and skills
5. Organising work
6. Networking and collaboration
7. Measuring what matters
Thus, appropriate information technology is a central component in improving workplace productivity.

Further, critical measures of productivity in the service industry are the service transaction and the outcomes related to the performance of that service. Therefore, the factors to consider, where the aim is to improve productivity, are both product improvement and process improvement.

Another consideration is the influence that information technology can have over both the operational and value creation activities of any organisation. With respect to operational activities, appropriate ICT expenditure should be aimed at gaining efficiencies. With respect to value creation, or profit generation, activities ICT expenditure should be seen as an investment for the express purpose of creating greater value or generating more profit.

And so, the key question is – what is the aim of your ICT investment? Does it have the intent of improving productivity? Are you investing in things which reduce time taken to complete tasks? Are you investing in things which will increase your income? One is a TCO equation, the other is an ROI equation.
For more of what I have to offer, visit Dellium Advisory, follow on Twitter, connect using LinkedIn, or review my strategy and futures-centric blog.

Posted August 24, 2015 by terop in Business Strategy, ICT Strategy, Innovation

Can IT be used to improve productivity?   1 comment

The short answer is yes. Information Technology can be used to improve productivity. But to realize these gains, we first need to understand the components of productivity.

Now, productivity is a measure of how efficiently inputs are turned into outputs. For example, how efficient is the manufacturer’s production line in transforming raw materials into saleable goods? or, how streamlined is the collation of data that goes into all of those reports we produce?

So, what are the factors that affect productivity:

  1. leadership and management
  2. workplace culture
  3. technology
  4. skills
  5. process organisation
  6. networking and collaboration
  7. metrics

So, of these seven aspects of productivity upon which ones can information technology have a bearing.

Skills are a good place to start. A low cost and effective way is training to improve the use of the IT already in place. How well are people using spreadsheets, your line-of-business applications and reporting tools?

Process organisation. Quick wins can be had by using IT to improve the flow of information. Remember, IT is technology for handling information. For example, is data entered twice by different teams? Or, why can’t smartphones be used for inventory management?

Technology. Not just IT, but the innovative use of technology. It is a given that the appropriate investment in technology will pay dividends.

Collaboration. The exchange of ideas and information with others in the industry. Whether they be blogs, social media or smartphone apps, there is an abundance of IT to support and improve collaboration and technology.

Metrics. This is the measurement of, and the reporting on, key characteristics of organisational performance. IT, if used appropriately, can definitely assist in the gathering, analysis and dissemination of critical information.

Leadership. Its all about setting the direction and tone of the organisation. Leadership and management that is open to innovation, open to new, open to change and improvement will see IT as an investment. An investment that leads to both reduction in costs and an increase in profit.

Culture. In this age of a rich information technology society (Facebook, smartphones and WiFi to name three), investment in contemporary IT together with user training and an innovation mindset will lead to productivity improvements.


In summary, the answer is yes. Investment in IT does have a positive impact upon all of the factors of productivity.


For more of what I have to offer, visit Dellium Advisory, follow on Twitter, connect using LinkedIn,

or review my strategy and futures-centric blog.

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Posted April 27, 2015 by terop in ICT Strategy, Innovation, Leadership

IT Expenditure – Profit Centre Focus   Leave a comment

Why can’t IT be seen as a profit generator? Why is it that the default position when it comes to IT expenditure is efficiency and not investment?

For me the key here is that IT should not be seen as an amorphous whole. That its function is not the same across the entire organisation. An analogy. For example, don’t we view sales people differently to accounts staff? Isn’t the output from the operational people different from the executive? For if we have people in different roles with different purposes, can’t we have IT in different roles with different purposes?

Aren’t we aiming for effectiveness and efficiency from our operational staff, and income and opportunity growth from our sales staff?

Why can’t we view our information systems the same way? That is, that our information systems are dual use? That in different contexts in the organisation, IT should be viewed and used in a manner relevant to that context.

So, if IT can be viewed as a profit generator – what should our frame of reference be for making decisions? If technology is there to produce income – how do we decide what investments should be made?

If TCO is the measure for operational efficiency, isn’t ROI the measure for income generation?

And yes, there are other formulae for guiding investment decisions.

So, viewing IT from a profit centre focus requires an understanding of the range of potential gains from the investment. These include tangible and intangible factors. It requires a judgement about the additional cash flows from the range of projects under consideration. It requires an understanding of the opportunity costs of doing one project and not another. It requires alignment between the business goals and IT strategy.

For me, IT can definitely assist in the generation of intellectual capital. It can improve income generation potential.

Think about this – if the organisation you work for, whether for-profit or not-for-profit, is operating in the information space – doesn’t it stand to reason that information technology is fundamental to the creation of value?


For more, visit Dellium Advisory, follow on Twitter, connect using LinkedIn, or review my strategy and futures-centric blog.

Posted September 22, 2014 by terop in Business Strategy, ICT Strategy, Innovation

IT for Strategic Advantage   Leave a comment

Given that strategic advantage is gained through the management of information, how are you managing your information?

And where is your information? Is it locked up databases only belonging to unique applications? Is it hidden in those hundreds, or perhaps thousands, of files of unstructured data?

And yes, all that structured and unstructured data is secure. Its backed up, its well managed from an operational perspective. But is it well managed from a strategic perspective? The auditors can come past and give you a clean bill of health from their perspective, but can the forward thinkers come past and say “wow!” Will these strategic thinkers come past and tell you will certainly maintain the health of your organisation through your perceptive management of information.

For IT is a fundamental aspect of enabling staff to be flexible and to be forward thinking. Yes, IT is there to obtain operational efficiency. But its also available to support, even lead, the strategic positioning of your company.

And the importance of strategic positioning? Well, have you thought about what is happening around you? Have you thought about the jetstream of business today? Reflect on the word change. On the improvements we see daily in all manner of areas? On the increasing effectiveness of all manner of new services. Doesn’t life seem to changing at an increasing rate? What about your markets, your customers, aren’t they changing too?

So, how do you keep up? Do you drill into your data to look for historical insight? Do you gather information from outside your organisation to assist in the forecasting of what path to follow?

You can effectively use information technology to improve your strategic positioning.

For more, visit Dellium Advisory, follow on Twitter, connect using LinkedIn, or review my strategy and futures-centric blog.

Posted August 29, 2014 by terop in Business Strategy, ICT Strategy, Innovation

IT Bias Improves Innovation   Leave a comment

Research indicates that investment in IT leads to improved innovation outcomes. For the purposes of this short discussion, there are three components of innovation:

  1. the intensity of research & development
  2. acknowledged Intellectual Property of the firm (patents)
  3. the value of intangible assets

Further, it has been found that four of the top five reasons for investment in information technology among Fortune 500 companies are related to:

  • intangible assets
  • innovation activities
  • exploration activities

Thus IT is associated with the finding new areas of growth, for exploring perhaps unchartered territory. IT is central to innovation. A focus on IT improves the value of the firm by expanding the intangible asset base.

So, are you using information technology to:

  • develop new products?
  • analyse current and new markets”
  • expand your theoretical knowledge about your products and services?
  • understand how you can do what you do in a better way?

For more, visit Dellium Advisory, follow on Twitter, connect using LinkedIn, or review my strategy and futures-centric blog.

Posted August 18, 2014 by terop in Futures, ICT Strategy, Innovation