The Next Big Thing
Posts about next generation technologies and their effect on business.

What is your core business?

One thing that people in business need to be asking themselves is "What is the core business?" People working in IT may need to ask it more often than most, since they can be a bit removed from revenue generation. Business value generation has always been the goal of IT - even if we sometimes lose sight of that fact.

 

In these dynamic days, organizations can shift how they generate value. Companies that used to be viewed as manufactures can suddenly be making most of their money through finance (e.g., leasing), or outsource all their manufacturing and focus on marketing or design. Chris Zook has written a trio of books about core business value generation. In them he states "nine out of 10 companies that had sustained profitable growth for a decade had focused on their core businesses, rather than following a siren's song toward diversification", but that one in three "completely transformed their core businesses, some even reinventing themselves completely." What's core today may not be in the future.

 

IT organizations need to be at least aware, if not involved in the corporate strategy so that they can enable the future, as opposed to just respond to it. Bob Evans also had an article on this subject in InformationWeek. In it he pointed to some questions that Bob Evans posed for any IT professionals:

1) In 12 months, what business will your customers what you to be in?

2) In 24 months, what business will your customers demand you be in?

3) Is your company nimble and agile enough to move at a pace that will let you change to meet the evolving requirements of those customers?

 

For an IT organization, that also means we need to look at the investment spend and how it enables the organization to hit those objectives. If the investment approach does not incorporate this thinking, "IT doesn't matter". There is no doubt IT organizations need to keep their eye on the current business, but not lose sight of the end business goal.

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