Agile companies can win from international engagement

Companies must be ready to collaborate with partners overseas, says IBM chief technologist

New Zealand has no shortage of small, agile enterprises that should be able to take a productive part in the connected international economy of the future.

This is one insight IBM New Zealand chief technologist Julian Lonsdale picks from the results of IBM’s CEO survey, conducted earlier this year and presented at the IBM Forum last week.

In an environment of increasing globalisation and rapid change, companies must be “hungry” to meet and cope with that change through continuous innovation and be ready to collaborate with partners overseas to supply missing pieces to implement an idea, he says. Innovation is not complete until an invention has been put into use, Lonsdale says, quoting IBM president Sam Palmisano.

Globalisation changes smart integration from vertical to horizontal, he says. Smaller companies with specialised fields of operation collaborate to rival and supplant business heavyweights.

IBM’s survey claims to show that companies that have put in place a specific apparatus for innovation increase both their earnings and their profit margin by 2-2.5%.

Today’s innovation process is not simply a matter of a dedicated research department coming up with new ideas that are subsequently moulded into services. Instead, product and service innovation, business-model innovation and operational innovation work together around a common company agenda.

The iPod is a classic example of this model at work, says Lonsdale; as innovative as the iPod was it would not have sold nearly as well without the iTunes business model and service.

The internet and particularly Web 2.0 is also a ready-made vehicle for consulting continuously with the customer base, he notes.

To press home the message of productive collaboration and ICT’s role in it, he compares the commercial model with the long-lasting popularity of massive multiplayer online role-playing games. The reason for the appeal of such games, to the point where people will pay to play them, is the idea of working collaboratively with fellow players who may be on the other side of the world.

Lonsdale cautions New Zealanders to beware of the narrow horizons living in a small country can encourage.

“What you think of as a niche product may be thoroughly commoditised overseas.”

Lonsdale’s talk followed a panel session on innovation strategy, featuring MetService CIO Russell Turner and Nigel Beach, R&D manager of Compac, maker of fruit-sorting technology.

This will be covered in a forthcoming issue of Computerworld’s sister publication, CIO.

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