There is no question that the business landscape across the globe has changed dramatically over the last decade. Only 74 of the original 500 companies in the S&P Index were still on the list 40 years later – a mortality rate of more than 10 per year. The average life span of an S&P 500 company has steadily decreased from more than 50 years to fewer than 25. Projecting forward, it’s likely that only about one-third of today’s major corporations will survive as significant businesses for the next quarter century.
Doing nothing is not an option. The changes sweeping over corporations and other organizations will not stop because they make us uncomfortable. The only way to win is to get ahead of these changes and to manage them in your favor. You can’t do that today unless your business and technology are united as one.
To create an environment where technology helps to shape--rather than simply enable--strategic choices, leading enterprises are already working to synchronize--rather than simply align--their business and technology decision-making. And in the best-managed modern enterprises, technology and business management will converge completely. Convergence occurs when business and technology activities are intertwined and the leadership teams operate almost interchangeably, managing business and technology together.
Our research since 1999, illustrates what leading organizations around the globe have learned about innovation through business technology convergence and not simply through innovating new technology. These include Global 2000 corporations, government agencies, small to medium businesses, and social enterprises. We looked into these organizations to better understand how they create innovative business models – models that can adapt as opposed to suffer from unexpected shifts in the market. And as a result these organizations drive an economy as a whole.
This research further also suggests that leaders who place a focus on converging the business and technology management disciplines of their companies attain far more financial success than those who continue to treat them as silos. There is demonstrable economic value in advancing business technology management maturity, and the payoff is greatest for those enterprises that are approaching convergence.
The ability for technology (in its purest sense) to give an enterprise a competitive advantage is limited by the similar adoption and application of the technology across the competitive landscape. The Convergence Index shows that when enterprises place the business strategy and model ahead of technology and use technology as a supporting piece of the strategy, the enterprise will continue to grow faster and with healthier profit margins than competitors who are using the same technology.
Would any self-respecting executive willingly throw millions of dollars at an investment without knowing how it could affect their business? The sane answer to this question is ‘no’. But for a long time now, many companies have made this exact mistake when they blindly allocated money to technology with little concern if it was put to good use or even for the objectives they were trying to meet in the first place.
A look at failed technology initiatives provides evidence that companies have faced this problem since they launched their first technology project. As the scope and risk of these initiatives increased, the effect of the disconnect did as well. By the time the Internet burst onto the scene, the scale of technology projects had increased to the point that the correlation between business/technology convergence and the success of innovation (or lack thereof) became unavoidable.
Most organizations fail to capitalize on the technologies they already have; and many more are poised to meet this same fate with the next big technology fad. Whether it's wireless, Web services, or the latest and greatest in nanotechnology, companies will never get value-real or perceived-without first solving the business/technology disconnects.
Globalization is redefining the marketplace and what competition means. We need convergence now more than at anytime in history to make the next generation enterprises thrive. Increasing energy, transportation, manufacturing and labor costs are redistributing wealth and power across the globe at a historically unprecedented rate. The delta between what were once considered first and third world nations is rapidly being nullified. The means for not only surviving but also thriving in the globalized marketplace is convergence.
The term convergence insufficiency (as defined in the field of medicine) occurs when human eyes don't turn inward properly while you're focusing on a nearby object. When we read or look at a close object, our eyes should converge — turn inward together to focus — so that they provide binocular vision and we see a single image. But if we have convergence insufficiency, we are not able to move our eyes inward to focus normally. Today this same convergence insufficiency occurs in enterprises when business and technology does not come together!
Business Technology Management (BTM) is a call to arms; a manifesto for making organizations and businesses nimble, agile and able to build differentiated, innovative and adaptable processes that expand their reach and grow revenue even in the most challenging markets and conditions.
– By Faisal Hoque ©2010, Faisal Hoque