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Meeting the Productivity Challenge Improving productivity remains a priority for Canadian organizations: our standard of living depends on it. At the same time that they are facing the challenges of an aging workforce and competition from emerging economies, Canadian companies lag seriously behind their U.S. counterparts not just in terms of the productivity agenda but also in the adoption of information technology to improve productivity. But a focus on productivity alone is not enough to sustain superior growth.
IDC believes that a renewed emphasis on innovation - the intelligent application of practices, approaches and solutions, underpinned by information technology - will position Canada and its businesses to thrive. Buying more technology without an innovative plan that details how it will create business advantage or indeed improve productivity is not the answer. This remains a challenge for many Canadian organizations. In the 1990s and early part of this decade, companies consumed technology with great appetite but without a firm understanding of whether this was the right thing to do. Many have come to question how the inventory they've amassed relates to their business strategy. The result is the short-sighted view of information technology as an expense, and little more. To be clear, information technology is a means to an end, not an end in itself. It is imperative that organizations look at themselves and ask the tough questions: are we doing all we can to optimize our productivity? Are we using technology to just keep the lights on and the doors open, or are we taking a hard look at all that we're capable of and understanding how IT can help us achieve more? At the end of the day, are we wringing every last drop from this investment, or is it simply taking up space? It's a conversation that Canadian business must have and one that most certainly extends beyond technology. Until you have that discussion, the naysayers will be right: IT doesn't matter; you won't be productive; you won't be competitive. So where to begin? With innovation. It is a crucial first step to infusing your organization with a spirit of innovation. Being innovative is much more than adopting a series of activities; it is an attitude. It is understanding how (and what) technology will allow the organization to set itself apart in the marketplace through innovative business strategy. It is dedicating oneself to finding better ways that deliver dividends for oneself, stakeholders and customers. The key is to establish a solid foundation from which to operate, and then be innovative. In order to make this connection in the first place, organizations require a complete view of what makes them tick: how they operate internally, how they can gain advantages by aligning information technology and business to be more competitive; how they deal with stakeholders and how they interact with customers. Before one can become innovative, one must know what one is capable of accomplishing. That's where business development models, or maturity models, can help. They describe the typical behaviour of an enterprise, business unit or activity at various levels of "maturity" or capability. In short, they measure success. Using them eliminates uncertainty about whether an organization is on track to reach or exceed its goals by allowing it to understand what it does well and then focus and execute against those benchmarks. One telling measure of the success and popularity of maturity models is the enormous breadth of activities for which models have been developed. More than a few models are in use assessing activities including software development, quality management, product design, research and development and project management. The underpinning principle is that mastery of maturity level one is critical to mastering level two and so on until an optimal level has been achieved. At the highest level of maturity, best practice is embedded in the fabric of the organization and may not be visible to the casual observer because it is a "way of life." One of the earliest maturity models was Philip Crosby's Quality Management Maturity Grid (QMMG), which describes the typical behaviour of an organization at each of five levels of maturity for each of six aspects of quality management. Like many of those that followed, the model suggests that most organizations evolve through the five phases - uncertainty, awakening, enlightenment, wisdom and certainty - on their path to quality management. Perhaps the most well-known business development model, however, is the Capability Maturity Model (CMM) for software development. Instead of an evolutionary path, the CMM takes a cumulative approach to achieving excellence, requiring that "key process areas" are performed as the maturity level increases The implementation of information technology has benefited significantly from the use of process and/or capability maturity models, both as a means of assessment and as an essential element of the improvement process. Organizations that understand exactly how resources are being deployed and used will stand to be more productive. But unless information technology is deployed in a logical and consistent manner, it is unlikely that its full benefit will ever be realized. Whether applied in a standalone or workshop setting, maturity models have proven useful for identifying good and not-so-good practices. The resulting scorecard or self-assessment is then easy to understand and apply. Maturity assessments can be conducted by an external resource or as a self-assessment, as a team exercise or by an individual. Involving a complement of internal and external resources in this process ensures a cross-functional view, minimizing the risk of single-lens bias. Experience has shown that assessments conducted as cross-functional workshops encourage discussion and debate of issues that might otherwise be ignored. The result is consensus and a shared commitment to a path to improvement. IDC believes that an organization undergoes major change on the journey to achieving the optimal level of maturity or "best known practice." Achieving maximum business value from the adoption of new information technologies is one of the many challenges associated with this difficult process. The use of maturity models to evaluate the implementation of an information technology project provides a snapshot of an organization's capability at each significant stage. Experience teaches that when the technology and business strategy are misaligned productivity usually suffers. To achieve maximum effectiveness, the strategies, operations and performance measures of all business units (IT and non-IT) must be aligned and linked with one another. Achieving this level of alignment is based on an organization's ability to integrate all people, processes and technologies. The value of maturity models lies in their use as tools for analysis and growth. Maturity models help to crystallize the indicators of corporate value. They provide insight into redundancies or the absence of specific competencies. This information is useful for making better investment decisions and for making a general assessment of an organization's strengths and weaknesses. By deploying a maturity model, an organization can develop an understanding of where interdependencies hinder or encourage growth, identify and leverage common elements and compare progress in one business initiative with another. These are truly the cornerstones of an innovative organization.
In a world that is increasingly flat, Canadian organizations will be challenged like never before. Winning organizations will all push in the same direction. The alignment of an organization's business processes and its information technology systems will greatly improve its ability to rise to this challenge. Maturity models are an invaluable tool to understanding what an organization is truly capable of and can help lay the groundwork for an organization that together, push toward productivity.
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