| BTM Institute Research: Financial Value of Convergence |
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This series of BTM Institute research reports introduces an index that highlights the connection between corporate financial performance and business technology convergence.
Convergence: The Wave of Future Success It’s not enough to measure the productivity levels of information technology in the abstract. The ultimate measure of any enterprise activity is how it affects the top and bottom lines. The Baseline/BTM 500 Study finds enterprises that fully integrate business and technology management are more agile, more competitive and potentially more profitable. Applying the methodology created by the BTM Institute and used in the Convergence Index, Baseline and BTM Corporation produced this report based on results collected from technology-savvy corporations highlighting the correlation between business technology management maturity levels and corporate financial performance.
The role of business technology convergence in innovation and adaptability and its effect on financial performance Technology is a major expense in the modern corporation and is deeply embedded in every aspect of doing business. Moreover, it has become the critical enabler of strategic imperatives – to be agile, resilient and innovative. These responses to the hyper-competitive global economy are interrelated, and accomplishing them requires converging business and technology. This can be achieved through certain organizational “constructs,” i.e., management behaviors, which have been identified in research and confirmed in practice. These constructs establish a foundation on which corporations can build innovative business models, including those designed for developing parts of the world. And they ultimately yield superior financial performance for the enterprise as a whole. This BTM Institute research report introduces an index that highlights the connection between corporate financial performance and business technology convergence. Surviving the 21st Century by converging business and technology to achieve agility, resilience, and adaptability The frenetic pace of business today has reduced the life expectancy of corporations and the tenure of CEOs. The response has been a call for agility, the ability to move quickly to take advantage of change. But definitions of agility vary, and implementing it is difficult. Previous BTM Institute research showed that companies that had converged their management of business and technology realized higher profits and faster growth than their competitors. It further showed that these companies were agile. This paper builds on that research to examine the attributes of agility and how successful companies employ technology to achieve it. Agile companies create the processes and structures that allow them to know what is going on internally and externally. They then develop the mechanisms to act on that knowledge. Although technology is seen by some as the solution, the evidence is that agility is achieved through basic management principles, the imagination to see the organization in a different light, and a willingness to change. In the end, the proof of agility is survival in an ever more turbulent global environment. How a real business architecture can reveal an optimum customer strategy Creating more value for your customer, and generating more value from your customer, is the responsibility of the entire organization, not just the customer-touching units such as sales. What happens back in the supply chain, hidden from the customers view, must be part of a customer-centered strategy. And, as with any business process today, technology will be involved. To succeed, companies must manage business and technology as one. They need a management framework that converges the management of business and technology in every part of the organization to optimize customer value. The Business Technology Management Framework offers this, in particular a strategic enterprise architecture. Consisting of a business architecture and a technology architecture, it enables scenario planning and predictive modeling, which lead to wise investments. This is customer-centered convergence. Surviving by innovating, becoming more efficient and abandoning what is not working The hyper-competitive global marketplace of the 21st Century demands that organizations act in new ways. As companies such as GE are demonstrating, corporations must simultaneously 1) be innovative with products, processes and business models, 2) abandon activities that no longer make sense, and 3) perform the activities they continue as efficiently as possible. To accomplish this, a management framework is needed. This paper makes the case that a management framework is necessary to achieve this: one that prescribes the necessary organizational structures, decision-making processes and information at every level, from the board to the project team.
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