Sitting at the chief information officer’s desk, it can be hard to imagine that future global economic trends have much relevance to the day-to-day task of delivering excellent IT operations to the business. However, these macro trends are already impacting modern businesses, notes Rohit Talwar, CEO of Global Futures and Foresight. The unsuspecting, he warns, are about to be left behind.
In his professional capacity, Talwar has to analyse global trends and identify start-ups and technologies that will play a role in shaping the future. The big trend that is set to define the future is the re-emergence of the economic powerhouses of Asia: India and China.
Those two countries, whose populations total 40% of the human race, are often seen in the West as emerging economic forces, rising out of poverty to challenge the old guard. But that is a truncated view, says Talwar.
In 1820, China and India produced nearly 45% of the world’s GDP and, according to some estimates, they will do so again by 2050. Indeed, China has been the dominant economy during 18 out of the last 20 centuries. The West’s economic successes of the past centuries are seen by many in the East as a momentary blip in their natural dominance.
During that blip, the cultures of the West have made the most of their affluence, consuming far more than their fair share of planetary resources. If the entire world consumed at the same rate as California, says Talwar, it would take six planet Earths to provide the necessary raw materials.
Ready to pounce
However, it is the ability to wring every last ounce of value out of resources that represents the most crucial challenge to Western businesses, says Talwar.
Already, companies such as Indian IT services giant Infosys – which Talwar believes embodies the new breed of alert and agile Asian businesses – have redefined their markets. Infosys, he says, regards change as an inevitability to be embraced, not avoided. This informs its policy of moving staff around job positions every year, so that no-one gets too set in their ways.
And its change-tolerant outlook seems to work: all of Infosys’ projects are completed to within one percent of the allotted time and budget, a statistic its Western counterparts could only dream of.
Elsewhere, Asian ingenuity and business acumen has shattered the perceived wisdom prevailing in markets such as mobile telephony, says Talwar. In China, mobile phones far outstrip the number of homes that have a mains power supply. This has lead to the rise of ‘charging points’ where mobile owners can charge up their handsets while they wait. What is remarkable about this service is the number of business models it went through in its first year.
Firstly, users were charged a fee for the power. Shortly after that, the operators exploited the fact that customers were forced to wait around while their phones charged and put up a screen to show paid-for advertisements. Then the operators put discount vouchers on their receipts, and the advertisers and service provider shared the proceeds. The mobile-charging service operators successfully implemented three novel business models within one year.
CEO, Global Futures and Foresight
Learning to change
Such inventiveness contrasts sharply to the West, says Talwar, where businesses have neither the technological literacy nor the time to think about the future, and so innovation crawls at a snails pace.
Talwar points to Indian mobile phone operator Bharti, which charges its customers the equivalent of £1.25 a month for line rental, and in doing so makes a profit. “But Vodafone struggles to make a profit charging £30 a month,” he says.
If Western companies are to survive the onslaught of cheap services that Eastern providers are now beginning to export, they must learn to be equally innovative.
Technology, says Talwar, will help them to achieve that. Social networking, for example, may appear to some as merely the latest teenage fad, but Talwar predicts that it will become an increasingly important part of the way businesses communicate with their market. The tobacco industry, for example, prevented from advertising via the mainstream media, has an opportunity to market itself via these new channels.
But developments in technology are also presenting new problems, and it is just as important for businesses to recognise these as it is to understand emerging solutions.
Many businesses see dynamic pricing, wherein prices are tailored to the precise details of the customer, as a beneficial strategy, says Talwar. But their ability to implement this is jeopardised by the amount of control individuals now hold over their transactional information.
“We are building our companies as data edifices,” says Talwar, “but we may reach the point where customers do not allow us to access their data, or charge us to do so.”
The data-centric model of business that is currently in favour presents another, perhaps larger problem: mounting complexity.
Businesses in the East have not had the resources to build highly intricate, complex systems, that in turn has allowed them to be agile. Western companies, for whom a relative abundance of resources has allowed inefficient practices to go unchecked for too long, would do well to mimic this trait.
Effective IT breakout: 4D problem solving
When delegates first walked into the 4D Structured Visual Thinking session at the Effective IT 2007 conference, they knew straight away that this was going to be a little different.
A colourful graphic, seven feet high and twenty feet wide, stretched across the front of the room, drawing everyone in. In the middle, below a title “The journey to the IT Summit”, a glowing sun was surrounded with discussion points, such as “Communication”, “Investment” and “Education”. On the extreme left, a colourful landscape of confusing lines under the heading “The current reality” conveyed what many participants obviously felt about their IT functions or their daily lives – confusion and chaos.
The two presenters, John Caswell, CEO and founder of GroupPartners, and his colleague, John Philpin had been drawing and pre-populating the chart since before breakfast began.
The challenge for Caswell now was to work with the delegates, using the graphic, a loose series of structured questions and a handful of coloured pens, towards thinking about how they approach a business problem: How could the delegates improve the standing and influence of the IT function within their organisation?
This was never going to be easy. Caswell and his colleagues at Group Partners have led workshops with senior managers in many organisations, often at board level, but they normally start with a blank whiteboard, and perhaps have a day or two to work through the issues. Frequently, the audience takes control and does a lot of the drawing.
The role of IT in business presents complex, deeply embedded challenges at many organisations, and Caswell had just 90 minutes to make some progress. Would the delegates (senior managers of IT, CIOs, IT directors, heads of information strategy, security, architecture, and the like) even want to play? Would they feel comfortable talking about problems in front of peers or even competitors?
Caswell himself betrayed no qualms. His methodology is tailored to extracting insights in situations where the problems often seem complicated or even intractable. The goal, he says, is to “help clients avoid solving the wrong problem really well”.
In the event, the method seemed to work and the floodgates soon opened. Often struggling to make their point in the hubbub, delegates pointed out that IT was often ignored, or not taken seriously, or that they were misunderstood. Some felt they were judged by different standards than those in other departments. Most admitted they did not have a clear plan to promote their own point of view, and that they often used poor terminology. Caswell mapped their points into the graphic.
Possible actions were identified: increased influence must involve better communication, and the use of common terms; clear deliverables must be established, because IT people were often not trusted, or because they had failed to keep promises or to deliver in the past.
The reasons for achieving a better alignment with business objectives were immediately obvious; trust, credibility and innovative thinking were quickly identified as key enablers.
The goal of the session was to highlight innovative approaches to managing more effectively, not to solve problems there and then. Nevertheless, one delegate admitted: “I suddenly saw that solving this problem really isn’t that hard. It’s just that we’ve never thought it through and set down a plan before”.
Another said: “The process showed that IT people are a bit isolated from the rest of the organisation. If we want more recognition and influence, we’ve got to accept some of the criticisms and meet the business at least half way”.