The Long Conversation: Maximizing Business Value from IT Investment

©The Long Conversation: Maximizing Business Value from IT Investment – Lorenzo, Kawalek, Gonzalez, and Ramdani 1

We argue that organizations need to maximize the value of their existing IT assets. It takes a long time and a lot of learning. In doing so, organizations need new organizational capabilities and social networks.

We are living in exponential times.

New technology announcements every day.

This is exciting.

The Long Conversation: Maximizing Business Value from IT Investment

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Businesses assimilate technology slowly.

How should one cope with that?

The Long Conversation: Maximizing Business Value from IT Investment

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A study of total costs of Enterprise Applications ownership by the Aberdeen Group reveals that companies with turnovers between $1–$5 billion pay an average of $5,920,785, and companies with turnovers between $50 and 100 million pay an average of $1,081,869 for a complete ES package, which includes the configuration and implementation of software, after-sales service, and maintenance.

The Long Conversation: Maximizing Business Value from IT Investment

For the last 20 years, companies have been implementing and adopting large-scale IT, most notably enterprise systems (ES).

They have done this in order to automate transactions, reduce costs, increase customer satisfaction, integrate with suppliers, and make better decisions.

Examples of ES include applications for: • Enterprise Resource Planning (ERP), • Customer Relationship Management

(CRM), • Human Resource Management

(HRM), • Product Lifecycle Management (PLM)

and, • Supply Chain Management (SCM).

©The Long Conversation: Maximizing Business Value from IT Investment – Lorenzo, Kawalek, Gonzalez, and Ramdani 4

The case of Enterprise Systems

Businesses are not able to exploit the full potential of their existing technology.

We jump to IT project by project like some kind of hyperactive frog and significant amount of IT value is left on the table.

As a consequence, IT is underutilized.

This happens every day, even in our individual interaction with technology.

IT investment

Business Productivity

The Long Conversation: Maximizing Business Value from IT Investment

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The main priority of businesses today is the value creation from the existing (already implemented) technology.

Executives should milk the current IT platform.

The Long Conversation: Maximizing Business Value from IT Investment

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The Long Conversation: Maximizing Business Value from IT Investment

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The application of the Long Conversation model has an important set of practical implications for organizations.

We have summarized these into three layers 1) The Business Value ladder, 2) The Long Conversation

process, and 3) The Organizational

capabilities.

The Long Conversation: Maximizing Business Value from IT Investment

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We see it as akin to a biological process.

The Long Conversation: Maximizing Business Value from IT Investment

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The Long Conversation: Maximizing Business Value from IT Investment

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Managing the implementation Project management vs. an emergent learning process

Managing knowledge and learning Traditional training vs. social learning

CEO Role Project support vs. Capabilities development support

Key Users Role Implementing the system vs. Mastering the system

ES Team Project team vs. Social network

Directed incrementalism

Balancing direction with incremental execution (action-learning, and fast learning cycles).

Key to handle inherent uncertainty and political context

The Long Conversation: Maximizing Business Value from IT Investment

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IT journeys instead of IT projects.

Longtime, long-life journeys, instead of short IT projects.

This is our long conversation.

When we talk of the Long Conversation, we are talking of the whole process of living with IT, from its conception, past the point of accommodation and through into the ongoing processes of learning and innovation.

The Long Conversation: Maximizing Business Value from IT Investment

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Thank you very much!

The Long Conversation: Maximizing Business Value from IT Investment

Oswaldo Lorenzo Deusto Business School

Peter Kawalek Manchester Business School

Gastón Gonzalez Expertia Consulting Group

Ben Ramdani Bristol Business School

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