M is for growth

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M is for growth

• Jyoti Banerjee, M INSTITUTE

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Question Does IT matter?

• Robert Solow no evidence that IT made any
  difference to US productivity across the 80s and
  90s
• Nicholas Carr IT is an essential infrastructural
  element, like electricity or air-conditioning,
  but without any competitive advantage

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IT really does matter

• Keystone IT matters in mid-size firms because it
  enables
• Profitable business growth
• Scale increases in the complexity of business
  processes, organisation and business model.

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Mid size enterprises power the UK economy

• Only 6 of UK companies are in the 10m - 250m
  turnover bracket
• Yet they employ 30 of the British workforce
• And generate 20 of corporate profits
• And grow at over 8 per annum
• Despite their performance, they are nearly
  invisible
• They are usually lumped together with small and
  micro enterprises which are very different from
  them in character and operation.

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Understanding M companies

• M-focused research from the Institute of
  Chartered Accountants
• Taking the M out of SME a research study from
  the ICA and BDO Stoy Hayward

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Seven differences different ballpark?
Source 2005 research by the Institute of
Chartered Accountants and BDO Stoy Hayward
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How IT is analysed makes a big difference

• The amount of money spent on IT is a poor
  indicator
• Keystone analysed what IT does in all major areas
  of a business
• Sales and marketing
• Finance
• Operations
• Product development
• Supply chain management
• Human Resource Management
• Infrastructure

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Scenario-based IT Scorecard
Sales/Marketing
Operations
Finance Administration

• Project Planning and Mgmt.
• Contract Change Order Mgmt.
• Time and Expense Reporting
• Resource Management
• Procurement and Subcontractor Management
• Document Management and Delivery
• Benefits Administration Mgmt.
• Performance Incentives Mgmt.

• Sales Pipeline Mgmt.
• Proposal Development and Management
• Relationship Management Database
• Big company web presence
• Customer self service
• Marketing Campaign Management
• Complete insight about my customers

• Easy period close
• Effectively pay suppliers/partners on time
• Automated and timely collections
• Automated Payroll
• Online, integrated banking
• Taxes across products and regions
• Automated corporate governance
• Effective forecasting
• Complete insight about my finances

Empowered Professionals

• Easy to find information
• Easy to use information

3. Easy to Communicate 4. Easy to Coordinate
Teamwork
IT Infrastructure

• A network ties all computers and devices together
• Easy access to the Internet
• Pervasive Security
• Mobile and remote access to information and
  processes

5. Manage and Protect Data 6. Manage and
Configure Devices 7. Update SW on all desktops
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Sample IT Scorecard for PrintForLess.com
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Proposition larger firms can make better use of
IT
Proposition not supported by the data
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Proposition spending more on IT gives you more
capability
Proposition not supported by the data
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Multi-step / process-led IT works
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Multi-step / process-led IT works

• Formalised processes easier to handle complexity
• Streamlined operations growth without headcount
  increases
• Flexibility take advantage of new opportunities
• Better decisions visibility of critical business
  issues

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Applying the model to PrintForLess.com
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Bottom Line

• On a 100 point IT capability scale, 10 points of
  improved IT capability delivers 1.9 of
  compounded annual revenue growth
• Result applies to product and service companies
• Model works in US / Latin America / Europe surveys

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M-scaled challenges
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Find out more
www.minstitute.org
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M is for growth

• Jyoti Banerjee, M INSTITUTE