Every information systems department faces the “justification issue” at one time or the other. As business schools begin to redesign their curriculum to reduce delivery complexity and improve their value proposition, the question about the relevance of information systems crops up. It is now that time at Babson College. I decided to post the storyline for my justification and get feedback from others. So here goes….
The days of sustainable competitive advantages are long gone. We are now in the era of hyper-competition, where fortunes favor the nimble. Technological innovations is the engine that is driving many new innovations and information systems play a key role in delivering the agility needed to be successful. The drivers behind the current environment can be traced to the following factors:
Globalization and connectedness of markets -- suppliers, employees, and customers are becoming global, distributed and highly connected at the same time. As a result, companies have to think of themselves as being part of an ecosystem.
Changing work force: the majority of the people joining the workforce and customer population are being referred to as digital natives – these are folks that take the computers and the internet for granted. They have adopted new social and operating norms in the enterprise. To be successful, entrepreneurs have to understand these norms.
Pace of technological innovation: new infrastructures like cloud computing and the arrival of innovation platforms like Facebook, Amazon, SalesForce, Google and Apple are creating enormous opportunities for entrepreneurs.
New organizational forms – using new communication and collaboration technologies, concepts like virtual organizations, and remote business processes have created new options for working, managing, and collaborating
Digitization -- information about products and services is as important as the product or service. In fact, in a recent article that appeared in the Wired magazine, it was stated that application related traffic is now over 75% of the internet traffic – the information business has arrived and is real.
Innovation can be accelerated if this information deluge is harnessed. Take Google, for example. They invested in an infrastructure that allows an engineer in Bangalore to launch a new product (Google Finance) in a matter of weeks. Apple has transformed the music industry by using its iOS platform to introduce novel business models. It has created a unique information based business architecture to control the user experience.
Similar transformations are taking place in other industries. Netflix transformed the movie rental business and driven the leading player into bankruptcy using information to understand customer preference. While this transformation has occurred recently, the next one is already underway. The battle for the living room is forcing action from device makers, content providers and operating system vendors. This battle will create new winners and losers.
Manipulating the information about the product is as important as the product itself. Do you think of a car solely as a physical entity or as computer on wheels? This computer has information and can connect to other things. This visual can conjure up many new business ideas. GM had OnStar very early in the game but chose to keep it closed and not connect to other devices. Imagine if they had approached it like Apple or Facebook. In fact, these platform makers are now launching products to connect their devices like iPad and phones to the car and transforming the industry. In what other settings can we start creating information related businesses? What other industries are going to be disrupted?
Many of these transformation efforts are being led by lead users. Consider the company Appirio. This entrepreneurial venture went from 0 to 400 employees in 3 years. While its peers are investing 8% of their revenue into IT they have done this using just 2% of their revenue. The kicker is that they have done this with a zero IT footprint using the cloud. In addition to the low cost, they have created a very agile and nimble organization supported by an agile IT infrastructure. On opening a new office in Japan, they spent all their time discussing customers and employees and no time on IT. How did their IT infrastructure support that?
Information about companies is also being generated in novel ways inside and outside the corporate firewall. Social media based sites like Facebook and Twitter is causing major disruptions here. Most of this information is being under exploited today. Some organizations like Dell, Starbucks and P&G have figured out ways to harness it. In fact, they use these sources to generate leads, gather new product ideas and solve complex problems. How do you tap into the wisdom of crowds? How do you listen to the conversation and respond appropriately? When J&J failed to respond to the Motrin moms in a timely fashion on Twitter, they had a huge backlash and lost a lot of brand equity. Tools to track stakeholder sentiment have been developed and can be used to protect the integrity of your brand.
Sourcing work has become global and distributed. The site Wikipedia is maintained this way. The Linux operating system was conceived and built using a global, distributed strategy. Many companies have started to use TopCoder and 99Designs to get programming work or logo design work done. Using 99Desings, companies can crowdsource logo design at a tenth of the cost of using a firm on Madison Square. This can be a risky proposition. How do you verify the integrity of the bids? How do you go about putting a proposal together? How are teams organized?
The organizing logic for a corporation has evolved. In the days past transaction costs to find the right worker or suppliers or to protect IP or to monitor performace were far higher than allowing the marketplace to allocate resources. Using IT these search and monitoring costs have been lowered to a great extent. What new forms of organizations would emerge out of this development? In addition, these times call for being nimble and agile. The organizing logic will be closer to a marketplace than a corporation with its hierarchy.
Babson College is the educator, convener, and thought leader for entrepreneurship of all kinds. The college believes in creating economic and social value using entrepreneurial thought and action. Many of the new business ideas that our students explore are based on Technology. This is due to our proximity to the 128 ecosystem. In addition just over 20% of our school sponsored student projects (BCAP and MCFE) are based on technology. Over 20% of our students get hired in the technology sector or are asked to use information technology on their jobs.
Under these circumstances, it is important to provide good examples for students and practitioners to emulate. Our faculty members and colleagues in the community have been focused on these problems in their research and practice over the last several years. This has resulted in the development of several cases (wiki-based) that could help drive home key lessons. These are interesting times for budding entrepreneurs. Most interesting businesses like MSFT and Google were hatched during such times. Survival depends on creative and productive use of resources like information technology. Babson College is determined on building the leaders of the future that create both economic and social value. We are confident of delivering on that promise by providing the state-of-art education on the use of information technology.