Data Arteries – Enabling Business Strategy Through Information Technology

Regardless of size and industry, every enterprise is dependent upon information technology, and must have a strategy for how to employ it, especially as the internet becomes more pervasive. Information technology strategy is an enabler of business strategy. Not only must an enterprise manage relationships with its constituencies, but it must be able to connect with them electronically through data arteries – information supply, value, and demand chains. The information supply and demand chains are external; the information value chains are internal.

An information technology strategy is a special case functional strategy because every function in the enterprise requires electronic information delivery capabilities, and many require electronic process control also. In very large enterprises, strategy may be formulated at both the enterprise and organizational unit levels.

As websites such as Facebook, LinkedIn, MySpace, Plaxo, and Twitter become more pervasive in business, linkages between application systems and databases and social networking websites will be more important to enable constituencies to communicate both collaboratively and cooperatively. Just as email has become a primary method of communication between enterprises and their constituencies, so will social networking sites especially for advertising and ecommerce.

Business intelligence information can be used to identify opportunities for competitive advantage. However, information technology itself can be an enabler of competitive advantage, especially when there are opportunities to digitize products or deliver information products electronically. In such cases, business strategy is inseparable from information technology strategy.

Information technology comprises the analytical and operational application systems, databases, and technical infrastructure (hardware and networks) of an enterprise. Not all computer technologies are information based. Computer technology is used for process control applications in special purpose equipment. However, connectivity is essential as applications become more integrated. As digital construction and manufacturing practices develop through such technologies as computer-aided design/computer-aided manufacturing (CAD/CAM), the processes, the control of processes, and the products and/or services delivered by processes all rely upon information technology for connectivity.

For example, in the manufacturing industry, not only can design and manufacturing work be conducted through integrated CAD/CAM processes with electronic linkages to carriers, such as FedEx and UPS, but the entire project and process management activities can be monitored electronically from ideation to product delivery.

Through technologies such as electronic data interchange and electronic funds transfer, data and both digital and information products flow through information supply and demand chains in parallel to material supply and product and/or service demand chains. Within the enterprise, data flows through information value chains from supply chains and to demand chains.

Developing an information technology strategy document is essential for describing the requirements and for educating users because:

  • The impact is enterprise or organizational unit wide and other elements of strategy cannot be implemented without it
  • Administrative activities, such as legal, finance, and human resources, and operational activities, such as research and development, procurement, manufacturing or equivalent, distribution, marketing, sales, and service depend on information technology – analytical and operational systems support both administrative and operational functions
  • The time frames, expenditures, risks, and magnitude of efforts are usually larger and more complicated than other initiatives and must be clearly understood; information technology projects have a tendency to go out of control and under deliver – therefore, contingency plans are always necessary
  • The subject matter can be complicated if not well explained

Information technology strategy is usually packaged as a separate but related document to the strategic plan. It is deployed and executed through specific programs and projects that develop new or enhance or maintain existing application systems, databases, and technical infrastructure.

Large information technology development projects are usually cross-functional, and may be part of a broader initiative sponsored by multiple functions collectively. Broader initiatives that have information technology components include:

  • Market research and development
  • Product research and development
  • Infrastructure research and development for processes and information delivery

For example – for the development of a:

  • Digital manufacturing system integrating both research and development and sales and production activities (sponsors: Manufacturing and Sales functions – impact is on Research and Development, Procurement, Manufacturing, Distribution, Sales, and Service functions)
  • Financial, managerial, and regulatory accounting and reporting system (sponsor: Finance function – impact is enterprise wide)
  • Human resource management system (sponsor: Human Resources function – impact is enterprise wide)
  • Sales tracking system (sponsor: Sales function – impact is on all salespeople enterprise wide)

Some projects can be solely for the Information Technology function, in which case it is a customer of itself.

Steering committees should be established for major programs and projects representing the various impacted functions in order to resolve cross-functional barriers. Major programs should come under the review of a planning and policy committee at the enterprise level.

Information technology strategy formulation is a project in its own right at the enterprise or organizational unit level. Very large projects are grouped as a program of inter-related components under a program manager. Projects can be stand alone also. A single project can deliver one or more application systems and related databases and technical infrastructure, or multiple projects may be required depending upon complexity.

For example, when launching a new product, it may be necessary to conduct marketing, product, and infrastructure development projects that include the delivery of new systems, and upgrades to existing systems. However, if an addition to the product line is launched at a later time, a new project or set of projects may be required to enhance or maintain the current systems, or even develop new ones.

The work breakdown structure for downstream development, enhancement, and maintenance projects decomposes into planning, analysis, design, construction, implementation, and performance measurement phases. The performance measurement phase can be conducted in parallel with the other phases, and each must end with a performance review. A feedback loop to future planning activities must be established so that lessons learned from the past can be reflected in future initiatives.

Meeting the cost and schedule requirements is always a major consideration. Hence, “meeting the date” is a frequent requirement for project success. However, after implementation, the scope of what was delivered and its quality is usually remembered more than when. In anticipation of the need to make changes after implementation, an adaption project may be necessary to tune, standardize, and integrate the deliverables.

The planning phase is conducted at the enterprise, organizational unit, or program levels for one or more projects depending upon size and complexity. However, each application system and related databases and technical infrastructure is delivered through a project with distinct analysis, design, construction, and implementation phases. Each phase always begins with a detailed planning activity to ensure that resources are allocated appropriately. The work breakdown structure does not preclude the use of iterative methodologies within each phase for rapid application development and prototyping. Development, enhancement, and maintenance of websites can be very rapid, and heavily interactive with user involvement, when the appropriate tools are used.

Key questions and deliverables by information technology strategy project and downstream phases include:

Strategy project (enterprise and organizational unit levels):

Key questions:

  • How does information technology enable business strategy?
  • What are the investment priorities?

Deliverables include:

  • Information technology architecture (applications, data and databases, and technical infrastructure)
  • High level project phasing and plans

Planning phase (enterprise, organizational unit, and program levels):

Key questions:

  • What are the administrative functions’ systems and information needs?
  • What are the operational functions’ systems and information needs?
  • What are the priorities for the candidate analytical systems?
  • What are the priorities for the candidate operational systems?

Deliverables include:

  • Process models
  • Function models
  • Data models
  • Information models
  • Economic evaluation
  • Scope of analysis projects and schedules

Analysis phase (project level):

Key questions:

  • How do processes, functions, and systems fit together?
  • How do systems processes and functions relate to enterprise processes and functions?
  • How do systems processes and functions and enterprise processes and functions fit together?

Deliverables include:

  • Functional requirements
  • Economic evaluation
  • Scope of design projects and schedules

Design phase (project level):

Key questions (by system):

  • What are the system’s functional requirements?
  • What are the system’s technical requirements?
  • What is the total cost of ownership and benefits (tangible and intangible)?

Deliverables include (by system):

  • Application system specifications
  • Data and database specifications
  • Technical infrastructure specifications
  • Scope of construction project and schedule
  • Total cost of ownership/benefit analysis

Construction phase (project level):

Key questions (by system):

  • Is the system being constructed according to design?
  • If not, what change orders are required, and why?

Deliverables include (by system):

  • Tested application system and interfaces, databases, and technical infrastructure
  • Trained users

Implementation phase (project level):

Key questions (by system):

  • What are the costs and schedule relative to plan?
  • What is the scope relative to plan?
  • What is the quality relative to plan
  • When will the benefits be realized relative to plan?
  • What adjustments for tuning, standardization, and integration are required relative to plan?
  • What are the current anticipated enhancement requests?
  • What are the current anticipated maintenance requests?
  • What are the lessons learned for the future?

Deliverables include (by system):

  • Working application system and interfaces, databases, and technical infrastructure
  • List of enhancement requests
  • List of maintenance requests
  • Performance measurement report

As enterprises become more dependent upon the internet for connectivity with constituencies, it is essential to develop, enhance, and maintain the information technology strategy on an ongoing basis. The strategy must emphasize connectivity through the data arteries as digital and information products become more pervasive.

Formulating information technology strategy is an enterpriship (entrepreneurship, leadership, and management) competency.

Digital Finance

Digital finance is a robust medium to broaden the access outside the financial services to other sectors, which includes agronomy, infrastructure, services, energy among others. People without a bank account are accessing the financial services via the digital medium. Several stakeholders are utilizing the cell phones along with a gamut of agents to provide simple financial services at better suitability and reduced cost against conventional banking. It is also known as “Branchless Banking”.

Traditionally, the huge expenditure involved in constructing and managing conventional banks has been a key stumbling block for connecting with the low income groups. A banking infrastructure is not easy to manage in remote areas, while it would be expensive for customers in the rural areas to commute to the urban centres.

Digital finance assists in negating the obstacles. Agents having cell phones are the most optimal medium for handling less value transactions for low income groups, cost effectively. Cash flow into innovative digital finance firms keeps increasing for consolidating assigned digital banking, mobile solutions and delivery platforms among others.

The impact of digital finance on the global economy is expanding at an accelerated pace. It is transforming the way financial transactions are done. The benefits of the digital finance are many, including cost decrease, development of essentially digital financial products and services, including advanced ones. Certain digital finance products are delivered on modified global digital platforms.

The technological advancements provide new prospects for FinTech start-ups. It also assists various stakeholders including governments and firms to steer development. There is a need for a highly effective global regulatory infrastructure to manage digital finance.

The Establishment of a Facilitating Scenario for Digital Finance Needs Certain Critical Policy and Regulatory Queries to Be Resolved Such as:

  • Corresponding the keenness for innovation with assurance about the legal framework.
  • Regulating and protecting the provision of modified digital finance tools such as e-money.
  • Comprehending AML’s concerns pertaining to digital finance and mobile-empowered international remittances.
  • Monitoring digital financial services.
  • Regulating a wide array of third-party agents.

The provision of financial services via highly innovative technology, which includes mobile money, could be a driving force for the utilization of a gamut of financial services – credit, insurance, savings among others.

According to Jin-Yong Cai, International Finance Corporation Executive Vice President and CEO, “The benefits of digital finance extend well beyond conventional financial services: This can also be a powerful tool and an engine for job creation in developing countries.”

As per Thomas Duveau, the Head of Mobisol Solar Home Systems, “The buzzword ‘digital finance’ is already an everyday reality for our Tanzanian, Kenyan, and Rwandan customers who are using Mobisol Solar Home Systems. Paying for solar power in small instalments through mobile money is not a ‘fancy option’: It’s already the norm for commercial transactions by those at the bottom of the economic pyramid.”

Digital finance is also critical for the retail business. It ensures the small businessmen have the access to funding, along with the electronic payment systems, robust financial products and the opportunity to construct a financial track record.

According to Walt Macnee, President of the MasterCard Center for Inclusive Growth, “Innovations in electronic payment technology like mobile and prepaid enable people to live more secure, empowered and included lives and that digital money will be the only way to achieve universal access to finance by year 2020.”

Digital Finance is a priority for banks in the recent past. The innovations like mobile deposits have radically changed the reach of banking. Currently, customers are finishing most of the transactions online using a mobile or tablet device. Customers are very conscious about the latest technology.

The penetration of the digital finance is expected across various segments, including the medium scale business and corporate banking. There are obstacles like security, greater intricacy with regard to the kind of services required for distinct businesses.

Some of The Challenges That Could Be a Stumbling Block for Digital Finance:

Availability of Liquidity with Agents

Agents operating in rural environments usually have problems in honouring their commitments, resulting in displeased customers and falling confidence in the service.

Interoperability

Transferring money through the mobile is usually not interoperable amongst providers. This prevents the flow of money which could have been used to cater to more customers.

Malpractices

The increase in agents has led to various malpractices along with service delays in certain markets.

The Key Developments in the Digital Finance:

  • The availability of instruments to expedite the account creation process.
  • The utilization of biometrics (finger and voice) to facilitate customer verification.
  • The use of field oriented management instruments to monitor field personnel.
  • The appearance of third-party agent aggregators.
  • The development of applications that assist financial firms with mobile money amalgamation.
  • The creation of top notch technology that ensures digital payments in retail stores.
  • The use of other data options for arriving at credit conclusions.
  • The leverage of business intelligence.
  • The availability of micro credit through the mobile.
  • The expansion of financial products provided by non-mobile cash benefactors.
  • The advancements in financial competencies.
  • The overall buying and selling in agribusiness using the mobile apps.

Digital financial services are evolving across global markets. Certain nations with the available infrastructure are providing a wide array of products and services. The differences between nations are directed by many aspects, which includes the use of cell phones, the growth of financial infrastructure, the regulatory framework among others.

The part of innovation is critical, since it would ignite enhancement in the fast transforming mobile money environment. Any increase in process efficiency would reduce the cost and decrease obstacles.

The digital finance environment is changing continuously and would be radically different in the long term. In an increasingly integrated international economy, innovations from various markets could be implemented and customized to suit local requirements. It would help consumers from various income strata. The digital finance journey has been excellent, but it is just the beginning.

Home Security Systems and VOIP

The latest technology, Voice over Internet Protocol (VoIP), is having a huge impact on how home security systems will operate.

VoIP is a technology that enables people to use the internet as the transmission medium for telephone calls. Instead of using a telephone company’s wiring, VoIP routes the phone calls to the telephone using a high speed internet connection.

Why will this technology affect the ability of home security systems to transmit alarms? According to CANASA, using VOIP over traditional land line phone systems may cause a loss of ability to transmit signals. For the consumer, this means in order for alarm systems to remain operational over the long term, the technology used for signal transmission must be updated, re-imagined or revised.

A current issue regarding the use of VoIP for home security systems is that there are no enforced standards for the provision of phone service. Although an alarm company manufacturer may create a security system that works with VoIP, the system may become ineffective as soon as the customer switches service providers or even underwent an equipment change (such as a new router or modem).

Another downside is that if there were broadband failures, alarms would not be sent out. This lack of ability to transmit signals is a real concern. In the news there is talk of possible space debris or a meteor knocking out satellites and therefore interrupting wireless services. That would, again, render VoIP connections to these devices useless. For this reason, a conservative approach to VoIP home alarm devices is recommended. Patrons are cautions to keep their alarm systems on a landline connection at least until VoIP technology advances to the point where the current issues are negated. While having two phone systems may seem like an initial inconvenience, the peace of mind you have by knowing you home is safe and secure – not to mention the fact that you have a back up phone service – will help keep you calm during an emergency situation.

It is important to remember, however, that all new technologies have a few issues and these problems are usually quickly resolved to the advantage of the consumer. VoIP technology for home security systems is no different. Great strides are already underway to enable VoIP is on its way to becoming a secure, reliably, fail-proof method to transmit alarms. In fact, according to CANASA, In December 2009, AT&T has already submitted comments to the American Federal Communications Commission (FCC) to phase traditional phone lines out in its entirety and 75% percent of US alarm companies are planning a move from legacy analog systems to VoIP. It seems that VoIP is the way of the future and many service providers of home alarm systems are embracing this technology to keep their systems operational.

Since manufactures and dealers of home security systems have to move quickly to ensure they are current with this fast changing technology; it is imperative to purchase your system from a reputable dealer who is current with the industry and who can advise their customers on the best options for this developing technology.