IDC’s European IT Forum 2006: Strategy and Business Model Innovation Needed to Sustain Economic Growth

(PresseBox) (Frankfurt am Main, ) Attendees at IDC's European IT Forum heard that the major challenge facing European companies is to bring new technology-based products and services to market to make Europe more innovation friendly and better able to use ICT to improve productivity and counter the growing pressure of globalization.

Keynote speakers at the forum, which was held in Paris on September 25 and 26, emphasized that sustainable economic growth could be achieved through a new process of strategic planning and evolution of business models that reflects market changes.

“The fundamental challenge for most organizations, particularly in the ICT industry, is to alter their strategic planning processes in order to embrace more frequent changes in their external environment," said Jeff Sampler, professor of strategy and technology, Oxford University. "Many organizations have reduced strategic planning to an annual weekend retreat. This is hardly a situation that can detect weak signals and emerging trends. Unless companies do this they will continue to be astonished by the next surprising trends."

Chris Anderson, author of The Long Tail, focused on new business models that show the best way to take advantage of the shifts in culture and economy, from a focus on a relatively small number of hits (mainstream products and markets) at the head of the demand curve to a huge number of niches in the tail.

In short, he said, the mass market is turning into a mass of niches. The ability to reach niche markets represents a big opportunity for growth, and technology plays a key role in this process. "As the costs of production and distribution fall, especially online, there is now less need to lump products and consumers into one-size-fits-all containers," said Anderson. "In an era without the constraints of physical shelf space and other bottlenecks of distribution, narrowly-targeted goods and services can be as economically attractive as mainstream fare."

Luke Georghiou, professor of science and technology policy and management, associate dean of research, Faculty of Humanities, and director of PREST, part of the Manchester Business School, discussed the political aspect of innovation and summarized the radical recommendations made to European leaders for action in areas such as lead markets, regulation, and IPRs. "Accelerating the transition from a resource-based society to a knowledge-based society requires mobilization of a broad range of actions beyond R&D and innovation," he said. "A market-led vision and a reformed social model conducive to innovation are not alternatives to European values but are essential to ensure their sustainability and affordability. Europe requires a new paradigm of mobility, flexibility, and adaptability to allow R&D and innovation to create the value that can support our quality of life. Simultaneous and synchronous actions are needed at all levels to create a market for innovative products and services, providing sufficient resources for R&D and innovation, improving the structural mobility of Europe, and building positive attitudes and a culture favorable to entrepreneurship and risk taking."

John Gantz, IDC’s chief research officer, chaired a discussion of the CIO dilemma. It is obvious that emerging technologies can benefit the enterprise, but how open should the enterprise be to internal development and experiencing of those emerging technologies, when sometimes the relevancy of those technologies to the company’s bottom line or services is unclear?

The common theme of the panel, which included Dan Yachin and Gilad Nass of IDC’s emerging technologies research team, Michael Jackson, Skype’s VP of telecom and enterprise, and Yaron Polak, a partner in Israeli VC fund Genesis Partners, was that innovation must be nurtured, as technology-passionate employees bring in the new tools and usage models after experiencing them at home, and the CIO must find a way to leverage these employees’ knowledge and passion to the benefit of the organization. As Web 2.0 technologies and concepts are expected to be offered to the enterprises, CIOs must not conclude in advance that these are time-wasters and prohibit any attempt to integrate them within the organization. A great benefit for the information worker can be achieved by using Web 2.0 technologies, including RSS, blogs, Wikis, widgets, tagging, and an overall information sharing concept, which would enable faster and easier access to existing corporate data, such as ERP and CRM systems, and also enhance the enterprise’s ability to gather employees’ particular knowledge into a shared data pool, for the benefit of most corporate positions.

“While CIOs are working to get IT organizations closer to business executives and strategies, this is also an extremely important time for them to keep up with the growing flood of new technologies coming from the Web 2.0 community," said Frank Gens, senior vice president, Research, IDC, and one of the keynote speakers at the forum. “CIOs need their own R&D capability to keep up with how these technologies are being put to use in innovative ways for businesses, not just consumers.”

"CIOs in Europe are in a position to benefit greatly from new technology innovations. Web 2.0 services, long tail marketing, and new ways to reach customers through the Internet could be powerful tools to allow European businesses to grow," said Crawford Del Prete, senior vice president, Hardware and Communications, IDC.

Jimmy Wales, the founder of Wikipedia and the new Wikia.com site, discussed ways to quickly get access to relevant information, in a form you can use. He looked at some of the core ideas of the global free culture movement and talked about the revolution taking place in citizen-generated media and content. “Wikipedia showed the world only the first hint of what is to come, and Wikia is now showing some of what the future holds," he said. "From a neutral encyclopedia to the wide range of human expression, collaborative production under free licenses is a powerful paradigm.”

For the second year, IDC presented the EMEA Award for ICT Innovation and Business Transformation at the forum. This year the awards went to Portugal's Grupo Mota-Engil, for its innovative use of wireless technology to reduce costs and improve efficiency in the construction, engineering, and transportation sector; BIOMET Europe, which is based in the Netherlands and produces hip and knee replacement sets to hospitals, for its investment in RFID technology; and London's Westminster City Council for its Wireless City project.

Now in its 16th year, IDC’s European IT Forum attracted 700 registrations, including 400 end users. It was organized in collaboration with the following IT operators: AMD, HP, Intel, SAP, 3Com, AT&T, Hitachi Data Systems, Siemens Communications, Xerox Global Services, and Aldon.

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Edith M. Horton
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