Article - Business Management

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Lesson 5

1-1

as Prentice Hall

Chapter 12

New business models (e.g., Amazon, iTunes). New products and services (e.g., tablets, mobile banking). New or improved processes (e.g., ERP, supply chain). Cost savings (e.g., self-service, offshore sourcing).

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Comes about through organizational change

Frequently involves experimentation

Is necessary for long-term organizational survival

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Sustaining Innovation – improves a product or service for existing customers.

Disruptive Innovation – targets noncustomers and delivers a product or service that differs from the current product portfolio. It must create and capture new value.

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Continuous Change – Frequent, relentless and endemic to the firm.

Punctuated Equilibrium – assumes long periods of incremental change, interrupted by brief periods of radical change.

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Innovation in an organization lies at the intersection of the answer to three significant questions:

What is viable in the marketplace?

What is desirable to the business?

What is possible with technology?

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Figure 12.1 The Organization’s Strategic for Innovation with Technology

1. Ideation

2. Advocacy

3. Proof of Concept

4. Trial or Pilot

5. Transition or “go to market”

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Communication of value is essential to ensuring innovation is sustainable. From this perspective, value has two components:

1. Is it desirable?

2. Does it build our innovative capabilities?

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Motivate: Establish rewards for innovation.

Support: Create infrastructure to sustain innovation.

Direct: Manage innovation strategically.

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Experimentation is risky.

Incentives and rewards must be provided to support experimentation.

Good ideas can come from any source.

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Infrastructure is needed to support IT innovation and experimentation. Some organizations create formal centers (or laboratories). Intranets are being used to solicit new ideas. Financial support is frequently provided through internal venture support.

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Innovation centers’ strategies: Insulate – Create innovation centers where all lines of business can come together to address common problems. Seeks to take advantage of synergy.

Incubate – Innovation centers are placed within lines of business. Seeks to focus on specific problems or opportunities.

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Strategic IT experimentation must be directed to ensure it is relevant. Link innovation to customer value. Link experimentation to core business processes. Use venture funds to guide strategic initiatives.

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1. Strike the correct balance.

2. Create a sustainable process.

3. Provide adequate resources.

4. Reassess IT processes and practices.

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Focus on achievable targets.

Don’t rush to market.

Be careful with “cool” technology.

Learn by design.

Link innovation to business strategy.

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Incubate innovation.

Collaborate with vendors.

Integrate business and IT.

Send clear messages.

Manage the process.

Promoting learning agility.

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Organizations are starting to grasp the scope of continuous change that is being ushered in by technology and the innovative ideas that come with it.

“Innovation” is what is to come; thus addressing it thoughtfully and intentionally is the best way to ensure that an organization is ready for the future. 12-20

Chapter 13

Social media is the largest component of (online) data for organizations, but it is not valuable if not analyzed. Hence, the key question is:

“How can we use insights from the data we collect to improve our interactions with customers, suppliers or employees” (La Valle et al. 2011)

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Wikis Blogs Videos 3D user interface / visualization Presence awareness Instant messaging, Twitter Social networking communities (e.g., Facebook, LinkedIn) Reputation systems Gamified data

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Companies can then use data to:

Respond more quickly to the market by

making faster decisions.

Make patterns more evident, such as

problems with a new product.

Facilitate innovation in products and services,

based on customer and other types of

feedback.

Improve reputation and brand awareness. 13-25

Sensing – detection location Mass visibility – combination of real- time sensing of multiple entities and relationships. Experimentation – integration of real- time sensing and generate and gather data quickly. Coordination – combination of real-time sensing to adjust behavior.

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Governance

Business

Strategy for

Data New Skills

and Tools

Improved

Data and

Information

Capabilities Social

Media

and Big

Data Use

Business

Value

What are the biggest drivers of our profits?

How can we increase customer loyalty?

Do we have information that is easy to use

and useful?

Dashboards, visualization, trend analysis and simulations and traditional reports are technologies to make information more understandable and actionable.

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Determine what data to collect and how to

get it:

• Transition from siloed data to integrated data.

• Organize data and capture context and meaning.

Data Have four dimensions (Merchand et al. 2000):

• Unstructured

• Structured

• Internal

• External 13-29

Three level of analytics maturity in organizations:

Aspirational – support finance and supply

chain management.

Experienced – support holistic strategy,

marketing, and operations.

Transformational – day-to-day strategy and

operations in a planned and coordinated

fashion.

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Companies should have three sets of

competencies for dealing with big data

(Laney and white 2014; McAfee and Brynjolfsson 2012):

Information management expertise

Business analytic expertise

An analytic-oriented culture

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This process begins by asking the following:

Do we know what data people have socialized around our business and our product?

Do we have an inventory of the data streams in our ecosystem and those surrounding us?

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Have we thought about the data streams we produce? Could they be valuable outside our organization?

How many of our organizational systems could be architected easily to provide data in real time?

Are we keeping an eye on the changing value of our digital assets?

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The answers to these questions can be used to develop new strategic opportunities, such as:

Data generation – create new products.

Aggregation – create a data platform.

Service – create new and/or improve services.

Efficiency – optimize internal operations.

Analytics – develop superior

insight/knowledge.

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Short business horizons Business leaders have shorter time horizon in their thinking than IT and are often not prepared to anticipate new technologies.

Resources Social computing requires support and facilitation to make it effective.

Changing the culture

Organizational behavior must change if the value of social computing is to be realized.

Initial adoption rates are usually high but continuous participation often drops off.

The Vision The IT Manager’s Challenge

Blurred process & org. boundaries

Collaboration and sharing

Situational applications

Mass participation and accessibility

Transient information

Supports social behavior

Innovation and creativity

Viral

Dynamic

Situational roles

Social governance and etiquette

Collective intelligence; bottom-up

innovation

Anywhere/anytime connectivity

Ad hoc applications and inquiries

Firewalls and structured processes

Intellectual property and privacy protection

Maintaining transactional applications and

operational integrity

Authentication and authorization

Creating a permanent record

Support business behavior

Efficient use of resources

Secure

Backup

Regulatory accountabilities

Organizational governance and policy

Top-down business strategy

Managed data environments

Controlled communication

Scalable applications

1. Focus – Identify specific problems and then use data and/or social media to solve them.

1. Develop business-savvy IT staff – Promote business-IT rotation programs, and hire power users into IT.

3. Become a “data factory” – Work to improve data quality, usability, and integration.

4. Listening and engaging– Build deliverables that will engage customers with the company and provide superior customer service.

5. Consider hiring a graphic designer – Support IT in developing intuitive and easy interface designs and efforts.

6. Support actions that improve use – Communicate the link between use and value to keep teams focused on usefulness and ease of use in social media/big data applications.

Social technologies and big data will create new information platforms on which ideas that we never dreamed of will surface.

Companies should adopt these technologies in an evolutionary fashion rather than in a “big bang”.