Wednesday, April 17, 2013

IT Transformation-"One Size Does Not Fit All"

As I mentioned in the previous blog, in 1994 there was a sense of dramatic change.  Politically the Berlin Wall had collapsed a few years before and the Soviet Union collapsed into Russia and Federated States.  Economically import tariffs were falling, markets were being deregulated and foreign ownership was increasing...all more or less simultaneously across the globe.  Francis Fukuyama even wrote his now famous book "The End of History and the Last Man"  in which he hypothesized  "What we may be witnessing is not just the end of the Cold War, or the passing of a particular period of post-war history, but the end of history as such: that is, the end point of mankind's ideological evolution and the universalization of Western liberal democracy as the final form of human government."

We were also at the beginning of an information technology transformation driven by the proliferation of the Internet.    There was a sense that the proliferation of information technologies and communicative devices would "change everything." Entire business models would be overturned, industries transformed, old hierarchical structures swept away and replaced my new yet-to-be defined network centric organizations.

Like the failure of Fukuyama's Utopian vision of the universalization of government, "everything" didn't change in the commercial world either.  Here are some examples of how wide the variance of the impact of information technology:

Dramatically Changed               Incrementally Changed                Little Change             
Retail Banks                                 Health Care                                     Transportation
Bookstores                                    Education                                        Retail energy(gasoline)
Newspapers                                   Retail Merchandising                     Retail groceries
Video Stores                                 Government                                    Retail Automobile sales
Retail Music                                  Political fundraising
Travel Agents                                Personal investing
Personal Communication              Organizational hierarchies

The reader may have other examples.  I think there are a couple of insights for leaders in this.  One is not only is there a wide variance among business sectors, within a business sector like retailing, there can be a wide variance.  What works in one instance cannot automatically be transferred to another instance.  The thoughtful leader has to carefully understand the value chain of their business from manufacturer, to suppliers to end customer and carefully analyze the value added at each intermediary step.  If there isn't a sufficient value added the intermediate step will be dis-intermediated...eliminated.  Travel agents have almost been eliminated because individuals can access and evaluate options and get the best value for money on their own.   On the other hand grocery stores still exist because they can aggregate a large number of suppliers in a wide variety of food and beverages in ways no individual could possibly do on their own.  When it comes to IT transformation "one size does not fit all".

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