Organizations are crossing the digital divide. An e-volution is taking place, from an analog business model to a digital model. Business relationships, cycle times and innovation have been fairly linear in the past. Concurrency, speed and integration of operations will no longer be differentiators, but requirements for survival. The realities of an Internet- enabled economy are driving this change, forcing a new operating model which is underpinned by information. Last month, we examined the specifics of this new business model and how an organization had to begin to look at its data assets as a major source of competitive advantage. In this column, we'll look at how you can help to drive enterprise value within this new model.

The wealth creation model in the new e-conomy has different priorities. (Refer to Figure 1.) Two primary elements driving shareholder value, growth and profit, remain. An interesting departure is that the importance of growth has eclipsed profit in the current environment. Why? We have reengineered discipline into our businesses; and, in general, they are pretty efficient. In a sense, we have raised a generation of cost cutters. There is not a growth culture in many businesses today, and Wall Street knows it. The organizations that are increasing their operating profit faster than the industry average but growing revenues slower than the industry average have had a market capital appreciation of 131 percent in the past four years. Compare that with the companies who are growing faster than the average, while lagging in overall profit improvements ­ these companies have appreciated 182 percent in market cap during the same period.

Today's markets are also recognizing two other factors which enhance shareholder value ­ intangibles and technology utilization. Intangibles are about establishing net future expectations of a company's performance. A business' unique ideas, concepts, agility, brand, public relations and other qualitative dimensions are driving enormous gains in valuation. Intangibles create "competitive insulation" ­ something which is palpable, yet not quite tangible ­ providing an enduring advantage over the competition (although in Internet time this still may only be months). At the heart of the new enterprise value model is technology utilization. Technology is enabling new growth initiatives, advancing cost efficiencies and propelling intangibles. Technology is finding its way out of the shadows to the forefront of the CEO's agenda as it ascends to new relevance in helping to achieve overall enterprise value.


Figure 1: E-Conomy Wealth Creation

So now what? What are the essentials we must follow to not only align with the wealth creation model, but also make it a reality in our respective companies. Focus on the following themes to lead your organization's e-volution.

A New Business Case

As we discussed already, the model for creating value can no longer be measured strictly in traditional terms of return on investment, but rather on net future expectations (NFE). Your senior management team is not just looking for revenue growth or cost savings, but avenues to enhance intangibles ­ brand strength, market perception on how easy you are to work with, partner information exchanges, strategy execution and corporate agility. Align the benefit side of your cost/benefit analysis with the new wealth creation model by describing how your decision support initiatives will drive growth, profitability and intangibles.

Out of Minding

As executives bring new items onto the corporate agenda, other items must fall off. These less strategic aspects of the business will soon be "out of sight and out of mind" from your senior executives' point of view. This out of minding will create unprecedented bandwidth at the highest levels of your organization to focus on technology utilization, a topic that has previously been downshifted in the organization. Capitalize on this long-awaited access to the CEO suite. Reinforce that success in the Internet economy is not only reserved for tech companies, but also for those who creatively use technology. As one Wall Street analyst said recently, "We are tracking not only the high-flying techs, but those organizations who apply technology to their core, traditional business." Watch stalwarts such as Whirlpool, Ford and Wal-Mart for excellent examples of this.

Rationalize Content Delivery

Take a forward look at your decision support environment to ensure cohesive management and delivery of digital content across the diverse information domains, including structured data, image, electronic documents and knowledge assets. As we know, the continued need for new, function-fitting technology will only serve to compound the issue. These technologies cannot simply coexist, but must cooperate within an integrated information blueprint. Avoid partitioning potential solutions based upon the underlying technology and aggressively explore multi-channel portal strategies which maximize dexterity in delivering all forms of content.

Create Change

We've all heard for years that we must manage change when bringing new technologies to our organizations. I suggest you should actually strive to create change in your environment. Upset the status quo ­ not to the point of instability, but enough to generate new opportunities and to border on the edge of new domains of risk. If your company is not challenging itself to reach the point where it is uncomfortable with the amount of change in progress, you can safely assume you are losing ground to other leaders who are.

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