I must admit, I’ve never been much of a pioneer when it comes to most new technologies. This I’m sure doesn’t shock my extremely talented staff. I was the last of my friends to get a cell phone. I held off on joining Twitter and Facebook until my kids told me I had to do it. And for years I refused to utilize a CRM solution, and rather opted to continue using my physical MoleSkin book to keep things organized (several of which I kept and it’s pretty interesting to look back a few years ago and see what incredible notes I had written on a daily basis).
And it wasn’t until last month that I downloaded the QR code reader app on my iPhone (and now I’m like a little kid scanning every QR code I see). But for some technologies or services, I have been more of a pioneer. I was one of the first users of Basecamp to collaborate projects with my staff online, across multiple business units. And I was an early adopter of Voice Over IP.
I tell you this since there’s a new type of product delivery that’s available to companies and their customers everywhere. And while I’ve only dabbled in using it to date, I am going to be making much more use of it in the near future. And I urge you to do the same.
This new type of delivery model is Mobile. And the statistics proving why you can’t ignore it any longer are staggering. Consider the following:
1.) According to Nielsen, the iPhone’s growth was 10 times faster than the growth of America Online.
2.) According to the Mobile Marketing Association Asia, more people on planet Earth own a mobile phone (5.1 billion) than own a toothbrush (4.2 billion), “so gross but so true”.
3.) According to the CTIA Wireless Association, 250+ million Americans carry mobile phones; representing over 80% of the nation’s population.
4.) Of those carrying phones, 62% of mobile adults aged 25-34 report owning smartphones.
5.) According to Morgan Stanley, 91% of all U.S. citizens have their cell phone or mobile device within reach 24/7.
6.) Nielsen Wire reports that 40% of all mobile phones in the U.S. are smart phones.
7.) According to Facebook, there are more than 350 million active users [44 percent] currently accessing Facebook through their mobile devices. And people who use Facebook on their mobile devices are twice as active on Facebook as non-mobile users.
SPEED & ACTION
8.) According to the CTIA Wireless Association, while it takes 90 minutes for the average person to respond to an email, it takes just 90 seconds for someone on average to respond to a text message.
9.) According to Mobile Marketer, 70% of all mobile searches result in action within 1 hour.
REVENUES & RESULTS
10.) According to Borrell Associates, mobile coupons get 10 times the redemption rate of traditional coupons.
11.) According to Yankee Group, global mobile payments (called m-payments) currently total approximately $240 billion and are expected to exceed $1 trillion by 2015.
12.) According to IDC, mobile app downloads will reach 76.9 billion in 2014 and will generate $35 billion in sales.
13.) According to Reuters, mobile customers display a ferocious loyalty to their current device. 80% of Apple users would purchase another device of the same brand.
So what does this mean to you?
Well to me, it means that mobile delivery solutions should be a key part to your new product development strategy of virtually any company. Mobile delivery solutions allow you to reach customers quickly. Customers will get more and more used to paying you and other companies via their mobile device. And mobile applications will continue to explode, and are not only a way for you to stay in front of customers, but they could be a huge revenue source for your company.
For example, mobile banking consumers carry a higher balance than the average banking consumer and has a greater net worth. While still only representing a small percentage of banking households, that number is increasing. Understanding the unique needs of this lucrative segment could mean winning and retaining valuable customers.
Companies will need to figure out innovative and personal ways to deliver value to their clients, improve the user experience which in-turn increases customer loyalty.
So, don’t ignore this key market trend. Rather, seize the opportunity to become the mobile delivery leader in your niche.
For more information on how Williams & Garcia can help your company be a pioneer in this market, let’s have a conversation.
In Part 1 of this 4-part series, we discussed how to avoid the value traps by moving from IT’s old beliefs to the new reality. In this follow up (Part 2), I’ll discuss the next leg of our discussion on how to show that the value returned for the enterprise’s investment in IT exceeds the value invested.
Show Value for Money
The waste of money curest itself, for soon there is no more to waste.
~M. W. Harrison
For an organization that already lacks recognition by the business of the value of IT, managing that perception is not an overnight process. You cannot change the thinking of business unit leaders through a fancy PowerPoint with pretty charts and graphs. Regardless of how sincere your intent, professing that IT can actually help the business out in the future with a bit more investment or additional chargeback costs will result in looks of disbelief (or even disgust). If IT is not perceived to be visibly well managed, managing costs and service levels (quality), it will lack the credibility to influence the rest of the organization. The starting point is to manage that perception and show value for money before trying to prove that IT in an investment in future business performance.
We have identified 3 essential steps to delivering value for money:
- Measure and communicate IT’s performance in terms that are meaningful to the business
- Benchmark IT’s performance against internal, market, or industry peers.
- Provide data that will help the rest of the enterprise manage consumption of the services IT provides.
Measure and communicate IT’s performance
There are two reasons to measure and communicate It’s performance. First, if you measuring performance will establish a baseline (if never measured before) and reference point for which IT can be quantifiably scored and monitored, removing the element of false perception. You just can’t deny the numbers. Second, and more importantly, what isn’t measured can’t be improved. Identifying the areas in which IT is lagging and following up with measured improvement will go a long way to win the confidence and respect of the business as an internal partner.
The measurements used to show value for money must communicate that IT is providing the right services, at the right level of quality, at the right price. But the measurements must speak to non-IT leaders, to managers who aren’t or haven’t been engineers. An example of some business-centric measurements include:
|IT Metric||Equivalent Business Metric|
|Uptime||Sales and service channel availability|
|Application performance||Responsiveness; time to respond to a user’s request|
|On-time project delivery||Product availability|
|Workload consolidation||Cost-saving opportunities|
|Software defects||Product quality|
In essence, you have to assess IT through meaningful business metrics, identify issues, and fix the issues…the latter being the most important.
Benchmark IT’s performance against peers
Moving on to the next step, benchmarking, this idea is based on the fact that it is not possible to know whether IT is providing a competitive unit price for any given level of service (or quality) without comparing it to its peers. Is IT’s performance weak or world-class or somewhere in between? No one will know what the measurements mean without something to compare it to. We have found that benchmarking annually or every 2 years is ideal (more frequently doesn’t leave any time to implement actual improvements before the next benchmark). Note that before you can use valuable IT resources to benchmark performance, you will need to ensure at least a minimal level of stability and “maturity” (a four-letter word in some circles) in order to gather data in a feasible manner. In addition, there are a few exceptions and caveats as to whether you should spend time at this juncture to benchmark or how you should benchmark. W&G has a decision process for benchmarking that we share with clients to help them plan for, execute, or skip this step altogether.
Exceptions and caveats aside, we have dozens of benchmarks that we use on engagements, many of which may apply to your business and IT organization. These include:
- Cost and financial controls
- Operational excellence
- Customer satisfaction
- Business impact and alignment
- Capacity planning
The important thing here is to start gathering the data, improving areas that are difficult to measure so they can be measured, even if the numbers aren’t perfect. Start with the best metric available to you to begin the path to improving performance.
Help the rest of the enterprise use IT well
Last, and this is where it gets fun (from IT’s perspective), benchmarking and measurements help the business understand how to make good decisions about how they use IT. In the other steps, IT was on the hot seat; but once you’ve reached this step, the tide turns back to the business. The metrics used to communicate value for money will also help the rest of the business become smart IT consumers.
For those that like the various formulae for grading investment quality, this is not a question of making good investment decision (i.e. ROE, ROI, etc.), but rather a matter of making good decisions about cost. I can’t stress how important it is to have a consumption-based chargeback model, even if only for measuring the consumption of IT services without any real financial exchange between IT and the business. In most cases, chargeback reports will help the business to identify the best opportunities for managing their IT costs and will help them understand why unit costs are what they are.
Providing and proving value for money are the essential first steps in creating and demonstrating the business value of IT. By providing uncontested value for money, you can then begin to have the real conversations that we know you want to have: what investments in IT best improve business performance. By creating transparent, ongoing reporting about the performance of IT services, you can change the nature of the conversation about IT spend from “Why am I spending so much on IT?” to discussion focused on improving business outcomes with IT. And isn’t that the whole point?
Value for money (IT) – providing the right services, at the right level of quality, at a competitive price – and the rest of the business knows it.
During the past decade, the pendulum has swung all the way from abundant IT spending through to IT being seen as a significant business cost. This perceived lack of benefit delivered to the business compared to the size of investment in IT has resulted in a spate of cost cutting and outsourcing, rationalization of IT spending and the beginning of business owners holding IT responsible for costs and quality of services.
With the perception of IT now starting to inch back towards a more reasonable and balanced position – one where its value to the business is, albeit sometimes grudgingly, being recognized – IT needs to reposition itself as a trusted partner with the ability to quantify that value to the business. The introduction of governance and compliance requirements is also contributing to the need for IT to turn up the dial on its role as a business service enabler.
But how do we measure the value IT has to the business? The answer can be summed up simply be measuring the contributions IT makes to efforts to RUN, GROW, and TRANSFORM the business. IT organizations that show their value to the business take specific steps in a specific order, as follows:
- Change the way they think
- Show value for the money, meaning the right services at the right level of quality at the right price
- Position IT as an investment in near and long term business performance
These steps entrench IT into the value proposition of any business, regardless of size or industry. In this first part of a 4-part series, we will discuss the new way of thinking about IT.
Change Your Thinking to Avoid the Value Traps
"The road to hell is paved with good intentions," says George Westerman, research scientist at the MIT Sloan School of Management's Center of Information Systems Research (MIT CISR). According to Westerman, we should avoid the value traps: practices that seem to be good ones but actually prevent IT from delivering and communicating value.
Value traps, simply defined, are beliefs and habits that seem to be good but actually lead to trouble. They are not obvious failures. In fact, they appear to be great wins in the eyes of the business in the short term, but have long term repercussions as they prevent real value attainment. For example, "the customer is already right" or "the business it IT's customer" will do wonders for an IT organization during heightened times of dissatisfaction. But over the time, those value traps will set IT up for failure, because the customer is wrong most of the time and calling peers "customers" will inevitably drive a wedge between IT and the rest of the business.
Now we've all seen more than our share of value traps in organizations that we have been a part of. I believe that all companies have them to some degree. They are usually ingrained into the minds of both IT and business leaders as assumptions about the relationship between IT and the rest of the business. This is because IT organizations that are suffering from value traps have been too focused on themselves. Instead, they should always be focused on business performance, not just about IT. In order to overcome the value trap, IT organizations must have an epiphany, if you will, about their environment…a constantly changing one…one that requires new ways of thinking, behaviors, and skills or competencies. Even the terms and concepts used by IT tied them down further in the value trap.
Escaping the value traps requires breaking old habits and developing new ones that produce (and this is important) real and perceived value. In other words, escaping value traps requires a new way of thinking (or communicating) and a new set of rules, a new playbook if you will, for the management of IT.
Value traps can be placed into one of three categories:
- Visibility Traps: how you conceive and communicate the value of services IT provides to the rest of the organization.
- Excuse Traps: how your execution and delivery are perceived by users, or end-consumers.
- Role Traps: your relationships and what role you IT plays in your organization.
W&G consulting engagement are geared around helping our clients to avoid these traps through New Thinking™. All of our services have been designed to help measure and promote IT's value to the business. We can help you to think differently in order to visibly create and communicate IT value.
In the next part, we will discuss how IT shows value for the money.
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