Business Strategies and IT
The fusion of business and technology is one of the core overarching principles of what I refer to as an “Always On” business philosophy. To achieve a higher-level of IT sophistication, companies must begin to move from “budget-based thinking” to “portfolio-based thinking.” Specifically this means shifting its IT function from a focus on bottom-line costs toward efforts to maximize the top-line potential of the whole business.
Traditional budget-based thinking creates alignment conflicts with the business by treating IT as a cost that must be tightly controlled. IT then becomes a slave to cost-control, constantly justifying its “expense.”
In The Real Business of IT: How CIOs Create and Communicate Value, Richard Hunter and George Westerman explain that this means most organizations base their IT investment decisions on a non-strategic “process” that the authors label “Anything Else.” Decisions are based on politics, intuition and other non-rigorous approaches.
Instead, “portfolio-based thinking” shifts from the traditional cost-only model to one emphasizing business value. Here companies seize opportunities to gain competitive advantage, even going so far as to fundamentally alter their industries’ rules. Investments in IT innovation are prized.
Shifting your perspective is critical to maintaining a “fused” Always On atmosphere. IT investments must be assessed through a lens of well-defined prioritization so that top-line potential is optimized. Hunter-Waterman’s thesis, validated in seminal research at McKinsey, categorizes portfolio-based thinking IT investments in three buckets: Run, Grow, Transform.
“Run-the-business” investments enable essential non-differentiated services that achieve a desired balance between cost and quality. These projects and initiatives must be done in order to “keep the lights on.” As a result, they deliver the lowest ROI or perceived business value.
“Grow-the-business” investments foster improvements in operations and performance related to the company’s existing markets and customer segments. Value here is measured in terms of operational performance improvements (cycle time, improved quality) or in financial terms (capital expense reduction, increased revenues, reduced administrative expenses).
“Transform-the-business investments embrace new markets, products, customers, i.e., new horizons for the company and even for the industry. Investments are measured in prospective market share and new-market revenues. Big rewards are possible though big failures are as well. This category is extremely high risk.
Running, growing and transforming however are not ends in themselves. Instead, they point the firm toward the kinds of performance levels and improvements that should be expected from IT. They keep us looking in the right direction and choosing wisely as we maintain and advance our businesses with its expert assistance. Such carefully-calibrated structures insure we stay focused on the business value of IT investments rather than simply on IT's cost because without a focus on business value… anything goes!
Tim Hebert is Chief Executive Officer of Atrion Networking Corporation, a nationally-recognized expert in “network utility thinking” that provides training and consulting to companies in all industries. Atrion also works closely with Cisco Systems on network design, implementations and support. Contact Tim via [email protected] or 401-736-6400 or by visiting www.atrion.net
Intelliwave SiteSense boosts APTIM material tracking
“We’ve been engaged with the APTIM team since early 2019 providing SiteSense, our mobile construction SaaS solution, for their maintenance and construction projects, allowing them to track materials and equipment, and manage inventory.
We have been working with the APTIM team to standardize material tracking processes and procedures, ultimately with the goal of reducing the amount of time spent looking for materials. Industry studies show that better management of materials can lead to a 16% increase in craft labour productivity.
Everyone knows construction is one of the oldest industries but it’s one of the least tech driven comparatively. About 95% of Engineering and Construction data captured goes unused, 13% of working hours are spent looking for data and around 30% of companies have applications that don’t integrate.
With APTIM, we’re looking at early risk detection, through predictive analysis and forecasting of material constraints, integrating with the ecosystem of software platforms and reporting on real-time data with a ‘field-first’ focus – through initiatives like the Digital Foreman. The APTIM team has seen great wins in the field, utilising bar-code technology, to check in thousands of material items quickly compared to manual methods.
There are three key areas when it comes to successful Materials Management in the software sector – culture, technology, and vendor engagement.
Given the state of world affairs, access to data needs to be off site via the cloud to support remote working conditions, providing a ‘single source of truth’ accessed by many parties; the tech sector is always growing, so companies need faster and more reliable access to this cloud data; digital supply chain initiatives engage vendors a lot earlier in the process to drive collaboration and to engage with their clients, which gives more assurance as there is more emphasis on automating data capture.
It’s been a challenging period with the pandemic, particularly for the supply chain. Look what happened in the Suez Canal – things can suddenly impact material costs and availability, and you really have to be more efficient to survive and succeed. Virtual system access can solve some issues and you need to look at data access in a wider net.
Solving problems comes down to better visibility, and proactively solving issues with vendors and enabling construction teams to execute their work. The biggest cause of delays is not being able to provide teams with what they need.
On average 2% of materials are lost or re-ordered, which only factors in the material cost, what is not captured is the duplicated effort of procurement, vendor and shipping costs, all of which have an environmental impact.
As things start to stabilise, APTIM continues to utilize SiteSense to boost efficiencies and solve productivity issues proactively. Integrating with 3D/4D modelling is just the precipice of what we can do. Access to data can help you firm up bids to win work, to make better cost estimates, and AI and ML are the next phase, providing an eco-system of tools.
A key focus for Intelliwave and APTIM is to increase the availability of data, whether it’s creating a data warehouse for visualisations or increasing integrations to provide additional value. We want to move to a more of an enterprise usage phase – up to now it’s been project based – so more people can access data in real time.