how our approach to trendy technologies can help drive reputation & performance improvements for...

How our approach to trendy technologies can help drive reputation & performance improvements for our company

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Template provided by Marc J. Schiller, 2010. Do not duplicate or distribute without permission.For more information and tools for IT Leaders, visit marcjschiller.com

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Agenda

Objectives / Why we’re here today

The Opportunity

Origin

Evidence

How we capitalize



Why we’re here today

1. Introduce a technology-driven opportunity to improve our company’s reputation & performance

2. Suggest initial steps

3. Discuss response

Objectives:



The Opportunity

1. Take advantage of how people view companies that engage with popular technologies (“Buzz Tech”)

2. Capture the special momentum that Buzz Tech innovations bring to their implementers

Two parts:



The Opportunity: Origin

Chasing the Hottest IT: Effects of Information Technology Fashion on Organizations, by Ping Wang, Assistant Professor at the College of Information Studies at the University of Maryland

Published in MIT Sloan Management Review in June 2010

Examined over 30 years of data (1971 - 2002)

Studied popular business IT innovations and their impact on 109 companies that embraced them

Used Fortune’s America’s Most Admired Companies to assess reputation changes for the companies that engaged Buzz Tech



The Opportunity: Evidence

Key Findings

1. Buzz Tech associations improve company reputation Companies whose names appeared in articles about Buzz Tech experienced a rise in

reputation score (as measured by Fortune magazine in subsequent years). The increase was directly proportional to the increase in Buzz Tech associations by a

factor of 52%

2. Buzz Tech investments improve reputation scores even more Companies that actually invested in Buzz Tech (not just examined it) experienced

additional increases in their reputation scores (0.66 points on a 10-point scale for every $1 million invested)

3. Buzz Tech investments increase bottom-line performance Investors in Buzz Tech experienced bottom-line performance improvements as

measured by sum of returns on assets, equity and sales



The Opportunity: Evidence

Key Findings, continued

4. Association with and investment in Buzz Tech linked to CEO compensation increases

For every $1 million of Buzz Tech investment, CEOs compensation gain averaged $45,000 in the following year.

For every 1% increase in Buzz Tech associations alone, CEOs’ overall compensation increased 0.27% in the following year

5. Performance paybacks from Buzz Tech investments take time Performance increases due to Buzz Tech implementation came in Year 3 of the

implementation cycle. Year 2 of the implementation cycle often showed slight performance downturn

6. Buzz Tech opportunities don’t last forever Buzz Techs climb and reach peak popularity for a limited period of time. To achieve the benefits correlated to Buzz Tech association and investment,

companies must act within the window of popularity.



How we capitalize

1. Incorporate Buzz Tech into our PR efforts Generate press releases that cover our interests in, investments in, and implementation

of technologies currently considered to be Buzz Tech

2. Position you as an open advocate of Buzz Tech in our company Make you a “pro” on Buzz Tech deployed and planned for in our company

Make use of internal and external opportunities to talk-up the right Buzz Technologies (i.e. Our quarterly meetings, [relevant industry event], etc,)

3. Fund Buzz Tech R&D Authorize an IT budget increase of 1% to cover research and development of genuine

Buzz Tech opportunities for our company

but …Template provided by Marc J. Schiller, 2010. Do not duplicate or distribute without permission.For more information and tools for IT Leaders, visit marcjschiller.com


… it’s important to keep our expectations in check

Buzz Tech represents an interesting opportunity for exploration, not a magic bullet

Talking about our Buzz Tech interests will only take us so far

Real investments in and implementations of Buzz Tech matters most and offer the most promise

Buzz Tech, like most technologies, takes time to deliver the benefits of implementation



How we capitalize: Discussion

PR Opportunities

CEO Communication Opportunities

R&D Investment Parameters

Where do we begin?



REFERENCE SECTION

Additional Study Detail

About the Study

“Chasing the Hottest IT: Effects of Information Technology Fashion on Organizations”, by Ping Wang, published in MIS Quarterly (March 2010)

Discussed in the article “The Surprising Impact of Fashions in Information Technology”, published in MIT Sloan Management Review (June 2010)

Background Information

Researchers followed coverage of various IT innovations between 1971 and 2002, leading to the discovery that the popularity of specific innovations had a tendency to behave like trends in the apparel or entertainment industries, as measured by the volume of coverage of the technology. Publications of popular technologies demonstrated a growing trend over time, reaching short-lived sharp peaks in volume i.e. popularity.

From 1994 to 2003, the researchers followed 109 companies that were included in Fortune’s America’s Most Admired Companies lists and which also responded to an annual survey providing information about their budged investments in eight IT or IT-enabled innovations that were all fashionable for at some point.

The eight fashionable technologies were: application service provider (ASP), business process reengineering (BPR), customer relationship management (CRM), data warehouse, e-commerce, enterprise resource planning (ERP), groupware, and knowledge management.




Key Correlation: Association with Fashionable IT & Company Reputation

The more often a company’s name occurred in articles that also mentioned an IT innovation that was experiencing high or increasing popularity, the higher the company’s reputation score (between 1 and 10) was in America’s Most Admired Companies.

For each 1% increase in increase in mention of a company in an article mentioning a specific fashionable technology, a 0.52% increase in reputation was observed for that company in the following year.

Reputation increases were independent of whether or not the company invested in the technology.

Key Correlations: Investing in Fashionable IT & Company Reputation & Performance

Companies that invested more than their peers in a technology during an in-fashion period experienced substantial reputation scores increases.

Each $1 million of investment correlated with a 0.66 point increase in reputation score the next year

Companies that invested in a technology during an in-fashion period experienced lower performance the year following investment (as measured by sum of returns on assets, equity and sales), but experienced performance in the third year.

Companies that were highly associated with IT fashions, but did not invest in them did not demonstrate better or worse performance in the subsequent years monitored.

Companies that engaged in technologies that had passed their peak popularity in media coverage received no reputation increases.



Key Correlations: Association with and Investment in Fashionable IT & CEO Compensation

CEOs of companies that were associated with fashionable IT experienced an increase in overall pay (combined salary and bonus).

For each 1% increase in increase in mention of a company in an article mentioning a specific fashionable technology, a 0.27% increase in CEO compensation was observed the following year.

CEOs of companies that invested in fashionable IT experienced an increase in overall pay. For each $1 million invested in a fashionable IT, an average increase of $45,000 in CEO

compensation was observed the following year.



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