Lately I’ve been trying to come up with a pithy description for the changes technology is currently driving our companies toward, and came up with the following. Check out the text, see what you think, and leave a comment with your thoughts.
When the business cycle was long and environment was somewhat predicable (or at least more predictable than today), we focused on optimizing the steady state. The value-chain—viewing businesses as transaction factories—was our metaphor of choice, and our priority was to ensure that we had a complete set of information management tools (enterprise applications) to optimize throughput. Automation enabled our businesses to scale to the high transaction volumes that would deliver large profits. These value-chains are efficient but, somewhat like the Titanic, make it very difficult to point our business in a new direction. This was not a problem however, as the business cycle was long, our environment somewhat predictable and the icebergs still over the horizon.
Today we find ourselves in a much more uncertain environment. The business cycle is short and shrinking, and the steady state rarely exists for very long. We need a new metaphor to understand the business—one which lets us optimize our business agility, rather than transaction volume. This requires us to take a more granular view, focusing on the decisions within our business (and within our partners and customers), and the interactions required to support them. We also need to remove inertia from our business by shrinking its physical and IT footprints to our core activities and decisions, passing responsibility for supporting functionality to a broad partner ecosystem. This encourages us to continually optimize our business processes, tailoring them to the current business environment and context, as our employees, partners and customers work to make the best possible decision in each circumstance.