Technology Investments and Shareholder Value - A Consulting Perspective

Executive Summary: As per a recent Computerworld  survey , the Information Technology (IT) spending is expected to go up in 2015. The major areas of spending are expected to be in Security, Mobile, Business Analytics and Cloud. As organizations across industries dabble with the IT budget for next year, there are few factors they should consider before deciding the final budgetary amounts. This post is an attempt to discuss those factors that drive the IT decisions. Need for IT investments: Firms invest in IT primarily for two reasons - 1) to achieve Strategic depth 2) to Improve productivity. The priority for these two during the budgetary decisions varies depending on the business cycle and other macro economic factors. When an organization has high growth plans and the broader economy is doing well, the firm is more likely to favor IT investments that increase strategic depth against its competitors. When the organization is operating in an mature market or is facing head winds in th

In the complex web of today's regulatory environment, firms scramble for resources to conform to the regulations. Firms typically start out with a good, broader vision to overhaul their processes & IT systems while trying to meet the regulatory requirements. But over a period of time, they realize the complexities of working across multiple teams and understand the true impact of the regulations. Unfortunately, by this time the budget allocated for the regulatory compliance initiative would have overblown. The executives scramble for recovery, sudden budget cuts are announced, IT teams are downsized and a lot of useful IT assets/codes that had caused the budget overflow are kept in the parking lot (and probably never used again). Short term view of conforming to the regulations overtakes the long term vision for streamlining operations. But is this good for the long term health of the organization? Certainly not. Firms sacrifice long term operational efficiency for meeting

Insurance companies, banks, retailers - the common theme among all these sectors is the rapid scale of changes in the competitive landscape. If you own a small business fulfilling the grocery needs of the consumers in a lovely neighborhood of Hoffman Estates in Illinois, your business is disrupted. Online retailers can deliver groceries to your customers within a day or two and possibly at a lower price than you. Traditional banks serving local consumers can no longer limit their competitive research to their local areas. Insurance companies have to deal with never ending regulatory requirements. The competition has gone global and can come from all corners. These disruptions mean companies have to continually update their target market segment, understand the evolving needs of the consumer, translate his/her needs into desired features, develop products and services, modify/build new core competencies, assess their global competition, keep their costs down, develop the value proposi

Executive Summary: Change has become the new normal across industries. Healthcare industry is dealing with changing market dynamics and is only now realizing the full impact of Affordable care act. The finance sector is facing the ever increasing regulatory challenges on one side and the opportunities offered by the recovering global economy on the other side. US retail and b2b banking sector is under the impact of changing customer preferences vis-à-vis mobile banking. US Retailers are dealing with domestic “low price” challengers and the avenues offered by the investment opportunities in the emerging economies, especially in the e-commerce sector. Manufactures have the need to optimize the production and supply chains in order to lower costs. This article explores how effective IT decision making could help firms deal with the constant flux in their business models. Healthcare: The market dynamics in healthcare is changing, as the firms involved understand the true impact o

Executive Summary: The networked world has transformed the ecosystem we live in. It wouldn't be an exaggeration to say that we live in the most revolutionary times after the Industrial revolution. The highly informed consumer is more empowered than ever and that is posing both challenges and opportunities to firms engaged in business. This article explores some of the ways in which key players in Retail industry could respond to the changes and how the future of retail might look like. Disruption in Retail e-Commerce retailers, with their focus on reducing fixed costs, have had a major impact on big box retailers for a while now. The ubiquitous smart phones in the hands of the consumer have lead to show rooming, where the consumers check out a product physically in store, look up the product on their smart phones for the lowest price offered elsewhere and leave the store to order it online. Advances in back end connectivity have also resulted in integrated supply chain mana

Executive Summary BPM is traditionally known as a discipline to optimize an organization’s business processes and save costs. But a good consideration is to view BPM as an engine for growth. A recent Mckinsey & Co study on “Measuring the full impact of digital capital” views processes as digital capital that can drive the growth of the global economy. This article explores some of the possible ways in which BPM can contribute to an organization’s growth strategy. The reader is expected to have a basic understanding of the principles of BPM. Need for growth As the global economy slowly recovers from the financial crisis of 2008, the organizations are seeing sluggish growth in consumer demand. There is a wide window of opportunity open for any innovation that can kick start the demand for future growth. One way organizations can look for new growth avenues is by looking at their business processes. BPM for Growth and Expansion Increasing market share through BPM and