Building Competitiveness and Business Performance with ICT

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DefinitionKey Business Enabler:Mature digitizedplatformsThe maturity of a firms’ digitized platformdescribes the extent to which a firm hasreached an efficient level of standardizationand sharing across the organization withregards to technology, business processes anddata. Maturity refers to the extent to whichindividual local project solutions are developedin ways that are considerate of the interests ofother existing individual local project solutionsand even the interests of future solutions.Solutions should also respect enterprise-widestandards.To shed more light on the critical questionof platform maturity, the survey askedparticipants a series of questions regardingtheir ICT infrastructure platform, such as itsdegree of technology standardization; thebusiness process platform, such as the degreeof standardization of administrative andoperational business processes; and the dataplatform in terms of sharing data both withinthe firm and with key partners. Specifically,respondents were asked the followingquestion:INSEAD eLab research shows that those firmsthat have achieved and sustained a maturedigitized platform have overcome seriouschallenges along the road to maturity. Eachrequest for a new IT project must be managedin such a way that the request addresses boththe specific and immediate needs of the localbusiness unit demanding the new project. Therequest must also address the enterprise-wideneeds of the firm in the long term.Furthermore, when the IT group of a firmdevelops a new solution in response to arequest from a local business unit, the grouptypically creates a unique solution with atechnology component that supports aparticular way of doing things, such as abusiness process. During a typical year, an ITgroup may develop hundreds of solutions inresponse to as many local demands, with eachsolution having technology, business processand data components. Over time, thesecomponents can accumulate into the firm’sdigitized platform.On a scale of 1 (strongly disagree) to 5(strongly agree), rate the extent to whichyour firm has reached an efficient levelof standardization and sharing acrossthe organization along the following fivedimensions.• Information and CommunicationTechnology• Administrative processes (e.g., HR,finance, purchasing)• Operational processes (e.g., supply chain,sales, customer service)• Sharing data (e.g., product, customer,partner) internally• Sharing data (e.g., product, customer,partner) externallyThe key question is, are these individualproject solutions developed in a manner that iscoordinated? For example, if the componentsdo not follow a minimal set of standards,then the answer is no. In this case, the firmends up with what is commonly referred toas “infrastructure spaghetti.” Pretty soon, the“infrastructure spaghetti” slows down newapplication development and increases thecosts and risks of operating and maintainingexisting applications. Firms that make“infrastructure spaghetti” time and time againend up with immature digitized platforms.On the other hand, firms that have reachedan efficient level of standardization and canshare technology, business processes anddata across their organizations – these firmshave successfully developed mature digitizedplatforms.18 INSEAD eLab ICT Report
FindingDigitized platformsare associated withthe most significantbenefits and risksData on over 20 different types of performanceindicators were analyzed. For each performanceindicator and for several combinations ofperformance indicators, high-performing firmswere compared with low performing firms tosee if there were any significant differences interms of their investments in ICT and of thestrength of key business enablers.Overall, the research findings underscore theimportance of endowing investments in ICT,which are often driven by immediate needsand local interests, with investments in keylonger-term and enterprise-wide businessenablers, such as business involvement andboth technology-focused and managementfocusedtalent.Nonetheless, in terms of scope and impact, theresearch findings reveal that the most valuablebusiness enabler to invest in is a maturedigitized platform. Figure 6 depicts both theoverall scope and impact of having strong keybusiness enablers.In terms of scope, firms with mature digitizedplatforms experienced significantly greaterbenefits with regards to 88% of the performanceindicators, whereas the beneficial impact of theother enablers were evident in just over 25% ofthe performance indicators.In terms of impact, within the performanceindicators that improved with stronger businessenablers:• Firms with strong business involvementimproved the likelihood of being strongperformers by 63% relative to firms withweak business involvement;• Firms with strong access of technologyfocusedtalent improved the likelihood ofbeing strong performers by 72% relativeto firms with insufficient technologyfocusedtalent;• Firms with strong access to managementfocusedtalent improved the likelihood ofbeing strong performers by 63% relativeto firms with insufficient managementfocusedtalent, and:• Firms with strong access of maturedigitized platform improved the likelihoodof being strong performers by 96% relativeto firms with an immature digitizedplatform.In terms of impact, firms with mature digitizedplatforms increased the likelihood of highperformance by 96%, whereas firms withother strong business enablers increased thelikelihood of high performance by 63% or 72%.Clearly, it is beneficial to have all fourbusiness enablers. However, if a firmhas to prioritize which enabler todevelop first, the research stronglysuggests that it should prioritizeachieving and sustaining a maturedigitized platform.What follows in this report are more specificresults highlighting the value of a maturedigitized platform against the risks of animmature digitized platform.Figure 6: Firms with strong enablers are more likely to be high performers; Nonetheless, in terms of impact andscope, the most valuable enabler to invest in is by far a mature digitized platform.Key: Above the light blue bars are averagepercentage of firms that are high performers andhave weak enablers. Above the dark blue barsare average percentage of firms that are highperformers and have strong enablers. Belowthe y-axis are the percentage of performanceindicators that significantly correlate with havea key business enabler.Within enablergroup,average % of firmsthat were highperformersacross relevantperformanceindicators47% 48% 50%45%28% 29% 28%25%Weak Strong Weak Strong Weak Strong Mature Immature% of performanceindicators thatsignificantlycorrelate withhaving a strongenablerBusinessInvolvementManagement-Focused TalentTechnology-Focused TalentDigitizedPlatform29% 24% 29% 88%Building Business Performance and Competitiveness with ICT 19
Page 1 and 2: Building Competitiveness and Busine
Page 3 and 4: Foreword“ Information andCommunic
Page 5 and 6: ExecutiveSummaryFor the first time
Page 7 and 8: FindingUses of technologycan become
Page 9 and 10: Real SuccessEuropean policiesdesign
Page 11 and 12: FindingSimply focusing onICT invest
Page 13 and 14: FindingHigh performersmatch investm
Page 15 and 16: Real SuccessFerrovial: Selective us
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Page 21 and 22: These results provide additionalsup
Page 23 and 24: Overall, complementarities holdacro
Page 25 and 26: Real SuccessFerrovial: Howinvestmen
Page 27 and 28: Key Implicationsfor BusinessLeaders
Page 29 and 30: Key Implicationsfor PolicyMakersThe
Page 31 and 32: Next StepsTo remain relevant and co

Building Competitiveness and Business Performance with ICT

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