Logan Muller (New Zealand)
One wonders with all the technological advances in the last ten years, why so many businesses have been failing. It seems now that even our leading economies of the last century are beginning to show stress cracks in their infrastructures and old fix-it budgets are just not cutting it anymore. Technology has fulfilled all those reasons we were given 15 years ago why business was becoming harder and harder. Yet failures and inefficiencies are rife. With the obsession on technology, automation, integration, alignment, online, 24/7 it seems we have been avoiding asking the real questions at hand. Are our business structures out of date? Have they passed their use by date? Are we doomed to become another fallen empire because of arrogantly clinging to a dying commercial infrastructure? IT has accelerated the inevitable by empowering the customers in our consumer economies. Businesses are faced with the change or become extinct. The environments within which they operate are also under threat. Developing economies have blindly followed the American paradigm of business. It was developed in the 1800s and was based on an army model! The complete reverse of these attributes is what successful e-business is about. No wonder western business structures have scrambled to IT as a potential saviour- albeit in many cases, in vain. Socially the accepted modern economy was supposed to improve the standards of living, but has it increased our quality of life? The track in which society is racing was initially a foundation for a product driven economy to deliver its products to a needy consumer base. i.e. when demand outweighed supply. Look at when our corporate model was formalised, 1870 and based on the military model of delivering consistency and conformity to an unquestioning mass. Oh how things have changed in consumer needs in the last 132 years, but have our business structures adapted accordingly? NO. All we have done is encumbered an inappropriate system with layer after layer of sales, marketing and branding hype in order to perpetuate the model. Tell any producer in the 1800s that their $4 dollar item would need to sell for $180 in order to cover the costs of, branding, sales support, marketing and manufacturing logistics and they would have laughed in our face. Yet even with commodity items such as running shoes, this has become an accepted norm. The great producing economies of the 1800s and early 1900s have become no more than economies built around hype, marketing and now are the experts in customer manipulation. It has got to the point where, to maintain the product driven military based business paradigm, the ‘great producing economies’ can no longer afford to produce their products anymore and have to farm production out to the emerging economies in order to sustain the weight of the props needed to sell their goods. Ironic really. What is our social responsibility in the IT sector? Is it to the business entities that pay our wages, or to society to unleash the true power and benefits? IT has blindly followed the tunneled vision of these business structures and focussed on the automation of the entrenched business processes rather than focussing on new ways to make the entire paradigm more effective and efficient. Rather than asking how IT can be used to facilitate production based on need, we have concentrated on the continuation of mass production of goods and regarded ‘efficiency’ in its most superficial meaning. In a world of increasing pollution, huge disparities in living standards and education, why are we clinging to a economic paradigm in western economies, supported by IT in every conceivable form, that focuses on the production of goods for the sole purpose of making a dollar and being ‘competitive with the competition’ rather than the long term sustainability of our earth? Recent advances in Internet technologies have provided a mechanism for a truly customer led economy. A first step in a mindset that produces only what is needed. This advance is significant. Customer-led businesses are flourishing and, despite all the technology in the world, our top, down, product driven businesses are failing at a never before repeated rate. This paper examines the connection between IT and the need to re-engineer our commercial and organisational structures BUT not re-engineering from a business process point of view, but re-engineering from a philosophical viewpoint. IT has accentuated the failings in our business model. In a recent survey we discovered less than 4% of the websites surveyed showed any sign of the essential ingredients of successful business paradigms. It is the precursor to a research project in the author’s opinion is long overdue.