The cyclist in the peloton uses a speedometer to judge instantaneous speed, average speed for the journey, distance travelled and various other parameters to help manage performance. Good performance might be to arrive at the right destination, within an allotted time frame, and with all working parts both physical and mechanical accounted for. The trusty speedo can therefore support decisions relating to what is happening in real time, through a quantified awareness of both real-time and past performance.
But the speedo is not able to predict what is about to happen, whether that is related to traffic, road surface conditions, or micro-climatic conditions.
The cyclist therefore keeps both hands firmly on the handlebars, listens for traffic, and keeps focused on the road immediately ahead.
Decision making for the cyclist therefore involves processing information of many different types in parallel. Structured data is being transmitted via the speedo. Physiological data is being processed by eyes, hands and legs, which are adjusting continuously and automatically to the quality of the road surface, the gradient, the presence of obstacles, and state of energy reserves.
Organisations too, juggle information of many different types when making decisions. Hard data regarding the supply of goods or services is balanced with softer data regarding demand. Thus, decisions regarding the deployment of resources have an element of risk.
The traditional use of Information Technology (IT) in organisations was to give managers the “speedometers” they need to make informed decisions. Enterprise processes are designed and implemented to collect data on the use of resources, thereby giving remote visibility of immediate and past performance. As with the cyclist, these decisions cannot ignore the less quantifiable, more uncertain, or just plain unknowable external factors that influence the organisation’s performance. A competitors future position with respect to product or price, a regulatory change in reaction to a market condition, or unexpected customer churn, these are factors that have proved more difficult to quantify and incorporate into management decision making.
However, the incorporation of technology into daily life has evolved to a point where “digital disruption” is challenging the way we think about, and interact with, the world around us. The ability to render the physical world “smart” by equipping it with sensors and communication capabilities, the data science capabilities to identify patterns across increasingly complex data sets, and the ability to access infinitely scalable computing power via any connected device, have spawned a digital revolution that is similar to the industrial revolution of the 19th century. However, the different social, economic and prudential aspects of the resulting progress are not yet clear.
Notions of identity and privacy are surfacing as control and ownership of the resources that provide transparency are questioned. Organisations both public and private are concerned about their digital strategies, and social enterprise has come to signify how connectivity can create value at a community level. In all sectors of economic and social activity, the democratisation of information access has unleashed waves of fresh thinking that aren’t limited by how things are done today.
A key capability for competitive differentiation, therefore, will be in the design of new business models around these emerging technological capabilities.
Rather than becoming absorbed in the specifics of the enabling technologies, managers need more than ever to focus on the organisation’s strategic goals and the orchestration of resources to achieve those goals in a sustainable and profitable manner. Organisations need to understand the value of information as a key resource in the business model in the same way they have an innate sense of ownership of other resources, such as inventory or finances. Thus, exploring cloud strategy models has become a key driver of innovation in organisations today.
Dr. Fergal Carton specialises in Management Information Systems and Managerial Accounting Systems. Fergal worked as a management consultant for 15 years, starting with the Boston Consulting Group in London. He has been on programme committees for various European conferences (ECIME, CONFENIS, ECIS) and spearheads the FSIC research activity in mobile payment ecosystems. Fergal is Programme Director for the IMI Diploma in Cloud Strategy.