Linking Technology & Business Operations
Last week I posted about a recent McKinsey article focusing on the importance of linking technology and an organization’s business operations in order to create “real wealth”. McKinsey authors Manyika, Roberts and Sprague discussed eight trends that they say will help shape businesses and the economy in coming years. Here are a couple of the trends that seem to have implications for many of our associations:
1. Using consumers as innovators: Consumers can co-create with organizations and with your association. The Internet has evolved into a global platform supporting communications, interactions and advocacy. The authors suggest that organizations can tap into this new mood of customer engagement.
One example noted is Threadless, an online clothing store that asks customers to submit new designs for T-shirts and the community at large votes for their favorites. The top 4-6 designs are manufactured and the winners receive prizes. The authors note that companies that involve customers get better insights into customer needs and behavior and may even be able to reduce the expense of acquiring and retaining customers.
At the same time the authors caution that companies open to allowing customers to help it innovate must ensure that the companies aren’t unduly influenced by information from a vocal minority. Companies must also be wary of focusing on the immediate rather than longer-range customer needs, as well as care to avoid raising and then failing to meet customer expectations.
2. Putting more science into management: the authors point out that technology helps managers use ever-greater amounts of data to make smarter decisions and to create new competitive advantage and business models. Examples include “ideagoras” (eBay-like marketplaces for ideas), predictive markets, and performance-management approaches. Amazon.com is an example of advanced customer segmentation, using its recommendation engine correlated to purchase histories.
The authors suggest that leaders should recognize and capitalize on the power that information provides for their organizations. At the same time the authors caution that information is power; broadening access and increasing transparency may influence organizational politics and power structures. The authors also caution about the analysis paralysis that often accompanies data-driven decision making.
How are you and your organization thinking about technology and business operations in new ways?
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Comments
My role at the national headquarters for YMCAs is to provide technology resources and information to help all YMCAs use their technology more effectively and efficiently. This area of aligning technology with operations, strategic and business goals has been one of my forefront topics the last two years. I have worked with a committee of local YMCA IT staff to develop a model that illustrates how to align your IT. In addition we are in the final rounds of editing a self-assessment tool to determine your level of alignment between technology and operations. I read the McKinsey article you refer to and it mirrors some of the thoughts we have in our resource. I think this is an up and coming topic for NPOs (especially more sophisticated orgs with large operations staff). Glad to see this topic mentioned in this circle.
Posted by: Steve Heye | January 11, 2008 2:45 PM
Thanks, Steve. As technology geeks and geekettes, we can get pretty enthused about new technology. But the only real value it can bring to an organization is if that organization can find innovative ways to link and integrate the technology with strategy and operations.
This is the challenge for Web 2.0: the toys are great, but what's the strategy and business plan to use them? And how will we measure success?
Thanks for your post.
Posted by: Virgil Carter | January 11, 2008 4:41 PM