Performing Despite the DownturnBy BTM Institute Staff Writer | Posted 2009-09-29 Print
Enterprises that have achieved business-technology convergence can respond nimbly to change and use their superior performance to leapfrog over less-agile competitors and position themselves for future growth.
Performing Despite the Downturn
The downturn has had a marked impact on revenue and share price, and the survey results consistently show the damage done to company and industry performance. Trying to go beyond the noise, we performed a second performance analysis to examine an organization’s ability to react to challenging environments.
Not surprisingly, nearly 73 percent of the companies in the two top levels exhibited superior or average performance—a 15-point increase over last year. They held a performance advantage of more than 8 percent over their industry peers and were nearly a full percentage point higher than less-converged firms.
Baseline and BTM also examined the impact of company size on performance, as measured by revenue. Companies of all sizes are fairly evenly distributed across each of the five levels, with two exceptions. First, no companies with more than $75 billion in annual revenue fell into the lowest level. Second, there is a disproportionate representation (about 50 percent) of companies with less than $7.5 billion in annual revenue in that level.
The Baseline/BTM 500 is in line with previous findings of the BTM Institute (the research think tank launched by BTM Corp.), which established that converged enterprises know when to change the rules to maintain a strategic advantage over their competitors—and to sense and respond to changes in the marketplace. While less-mature enterprises enjoy increasing benefits as their maturity increases, none of them equals the performance of converged enterprises.
Level 1 enterprises, which are the least mature, typically execute some strategic capabilities in a disaggregated, tasklike manner. Level 2 organizations exhibit limited capabilities, attempt to assemble information for major decisions and consult the technology function on decisions with obvious business-technology implications.
Enterprises at Level 3 are functional with respect to the capabilities, and those at Level 4 have the capabilities fully implemented. Companies achieving Level 5 (about 1 percent of the organizations surveyed) have achieved full convergence.
The Baseline/BTM 500 study shows that as an enterprise’s maturity extends above Level 3, the resulting synchronization of business strategy and technology delivery makes the company more agile and adaptable. For such enterprises, changes in the business environment—such as the one we’re currently living through—rapidly drive appropriate adjustments to strategy and its execution, thereby limiting the damage of falling revenue and share prices, while exhibiting the superior performance needed to position an organization for the growth cycle that historically follows a downturn.
Leading enterprises in the Baseline/BTM 500 study have demonstrated that data has become information. In large measure, this information is available through and managed in an integrated, enterprisewide fashion that facilitates better and faster decision making.
Leaders look at technology as an enabler of enterprise strategy. They consider the technology implications of business decisions and look for innovative ways to embed technology into their business operations and processes. For them, technology is more than “information technology” or “operational technology.” It is, rather, “business technology.”
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