Archived Content
The following content is from an older version of this website, and may not display correctly.
Change happens. The impossible becomes possible, and those who make it happen gain an advantage over those who are complacent. This is true of the fast-moving world of data communications. For example, Nokia went from being the world leader in mobile handsets to just another subsidiary of a US corporation. But it was just as true thousands of years ago. The tribes that developed stone axes out-competed those who did not when they went after the same food. Then the men with axes were out-competed by people who added tin to copper and invented bronze spear tips so they could kill mammoths. Changes in technology are the way of the world, except now they happen faster. To paraphrase Charles Darwin, the winners are not those with the best technology but those who adapt best to changing technology.
The biggest change of our times is the invention of the computer; how it has become smaller and and less expensive. Computers brought about the flow of modern information technology. Many, if not most, businesses are their technology and their information assets, and very few would survive for long if they lost those assets. Information technology is no longer something peripheral that the CEO can delegate to the CIO. It is the business and it needs the CEO’s attention and ability to understand it.
IT-based movement
“Servicisation” is a clumsy word but it concisely describes an IT-based movement, from making things to providing customers with a service that is more valuable than a product. Take German truck maker man as an example. Faced with cheaper and successful Far Eastern competition for manufactured trucks, MAN looked at what its customers really wanted. The firm concluded that the cost of the truck over its lifetime was less than 10% of the total costs, but that fuel, repairs, drivers and insurances were more than 90%. So they re-focused the business away from making things to providing a total service, based on detailed real-time operational monitoring and analysis in a data center to help the customer become more profitable. The factory still makes trucks, but it is only part of the customer offering. MAN used information technology to change the business model entirely, rather than just waiting to be overtaken by cheap competition. It is not the technology that matters, it is the ability to foresee, change and adapt, and it can only be done at CEO level. Although it is about technology, CIOs cannot deliver such change on their own.
Even in insurance, already an ultimate service industry, information technology adds value to extend service offerings. The Co-operative Insurance company in the UK is one example. The Co-op pioneered smartboxes in cars for young drivers, or for anyone whose insurance profile earns them high premiums. The smartbox measures speeds and accelerations in real-time and sends them back to a data center where they can be analysed. Good driving behaviour is rewarded with lowered premiums and bad behavior is reported to parents and premiums are increased. Annual premiums become quarterly premiums, but could be any timeframe, including real-time premiums. Again, it’s all about the technology in the data center, but such a change in technology can only be made at the CEO level. The Co-op led because it was visionary and agile.
Organisations respond differently to threats and to opportunities. Often, larger organisations are so inwardly focused on their own internal issues and politics that they fail to see the big strategic picture and often label the few insiders who can see the overall picture, as trouble makers. Twenty years ago, if you had asked who the largest music company in the world would be 20 years on, almost everyone would have produced a list of music companies – EMI, Virgin, maybe even Sony. But the answer is Apple. The largest music company in the world is not even a music company. How about banking, one of the major users of the latest in information technology, and data centers? Is there any reason to believe, that, 20 years from now, the largest bank in the world will be a bank? And does anyone consider banks to be agile and adaptable organisations with strong strategic vision?
The computer, the microprocessor, information technology and the data center are the industrial revolution of our time But it is not technology that matters or who will get to eat the mammoth and who will starve or be eaten. It’s the vision that organisations have of the way they can use the technology and their flexibility and adaptability in the face of change. Agility in using technology matters more than the technology itself.
The opinions expressed in the article above are those of the author and do not reflect those of Datacenter Dynamics, its employers or affiliates.
The biggest change of our times is the invention of the computer; how it has become smaller and and less expensive. Computers brought about the flow of modern information technology. Many, if not most, businesses are their technology and their information assets, and very few would survive for long if they lost those assets. Information technology is no longer something peripheral that the CEO can delegate to the CIO. It is the business and it needs the CEO’s attention and ability to understand it.
IT-based movement
“Servicisation” is a clumsy word but it concisely describes an IT-based movement, from making things to providing customers with a service that is more valuable than a product. Take German truck maker man as an example. Faced with cheaper and successful Far Eastern competition for manufactured trucks, MAN looked at what its customers really wanted. The firm concluded that the cost of the truck over its lifetime was less than 10% of the total costs, but that fuel, repairs, drivers and insurances were more than 90%. So they re-focused the business away from making things to providing a total service, based on detailed real-time operational monitoring and analysis in a data center to help the customer become more profitable. The factory still makes trucks, but it is only part of the customer offering. MAN used information technology to change the business model entirely, rather than just waiting to be overtaken by cheap competition. It is not the technology that matters, it is the ability to foresee, change and adapt, and it can only be done at CEO level. Although it is about technology, CIOs cannot deliver such change on their own.
Even in insurance, already an ultimate service industry, information technology adds value to extend service offerings. The Co-operative Insurance company in the UK is one example. The Co-op pioneered smartboxes in cars for young drivers, or for anyone whose insurance profile earns them high premiums. The smartbox measures speeds and accelerations in real-time and sends them back to a data center where they can be analysed. Good driving behaviour is rewarded with lowered premiums and bad behavior is reported to parents and premiums are increased. Annual premiums become quarterly premiums, but could be any timeframe, including real-time premiums. Again, it’s all about the technology in the data center, but such a change in technology can only be made at the CEO level. The Co-op led because it was visionary and agile.
Organisations respond differently to threats and to opportunities. Often, larger organisations are so inwardly focused on their own internal issues and politics that they fail to see the big strategic picture and often label the few insiders who can see the overall picture, as trouble makers. Twenty years ago, if you had asked who the largest music company in the world would be 20 years on, almost everyone would have produced a list of music companies – EMI, Virgin, maybe even Sony. But the answer is Apple. The largest music company in the world is not even a music company. How about banking, one of the major users of the latest in information technology, and data centers? Is there any reason to believe, that, 20 years from now, the largest bank in the world will be a bank? And does anyone consider banks to be agile and adaptable organisations with strong strategic vision?
The computer, the microprocessor, information technology and the data center are the industrial revolution of our time But it is not technology that matters or who will get to eat the mammoth and who will starve or be eaten. It’s the vision that organisations have of the way they can use the technology and their flexibility and adaptability in the face of change. Agility in using technology matters more than the technology itself.
The opinions expressed in the article above are those of the author and do not reflect those of Datacenter Dynamics, its employers or affiliates.