October 31, 2016 | Written by: Jessica Murillo
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If the answer is “market laggard,” then you might ask: How do we transform our company into something that’s more connected and more digitally enabled? How can we tap into the connected economy, where value is created through technology-enabled links between people, machines and organizations?
I believe the key to transformation in the connected economy is clear. Market leaders recognize the threat from digital disruption and the value of IT leadership in bringing their company into the connected economy.
Embracing the connected economy now determines performance
This past year IBM sponsored HBR’s Analytic Services research unit, which conducted a survey with 692 business and IT leaders across technology, financial services and manufacturing companies worldwide. HBR asked, “To what extent does your company employ connected economy business models?”
According to the HBR report “The ecosystem equation: Collaboration in the connected economy,” nearly one-fifth of respondents that self-identify as market leaders said they are embracing these efforts to a significant extent. Just over one-fifth said they are pretty much doing nothing in terms of new business processes or products that are digitally enabled. And as you might guess, many organizations fell somewhere in between.
These results matter because connected economy business models perform better than others. Of the leaders in the survey, 67 percent said they increased revenue over the last three years on average by 10 percent or more, with the revenues coming from new products. Meanwhile, the laggards saw their revenue stay flat or decline.
Leading companies also say that to succeed in the connected economy, CIOs and other executives need to cooperate to provide strong leadership in technology investment.
Illustrating big upside potential—two examples
I recently participated in a panel with two leading organizations, Key Information Systems (Key Info) and PlentyOfFish Media (POF), and I asked them what they’re doing to embrace the future of the connected economy.
As a leading regional systems integrator, Key Info offers compute, storage, networking and other solutions to meet the needs of a wide variety of clients—and those technologies are rapidly changing.
“Hardware technology innovations are coming at a pace I’ve never seen before,” says Lief Morin, CEO at Key Info. “They’re becoming enormously disruptive. Certainly, they’re giving rise to the cloud architectures in which products and services can be consumed faster and delivered much more economically.”
Not long ago, Key Info decided to embrace the future by expanding to the cloud. “We were a traditional brick-and-mortar company, so it was a huge transformation internally,” says Morin. “The transition has benefited our customers because we’re able to complement our hardware and software sales with private and hybrid cloud offerings and managed services. This kind of change takes political will, with business and technology leaders taking a stand and saying this is what we’re going to do.”
At POF, one of the world’s largest online dating sites, both business and IT recognize that technology is driving the company’s digital business strategy. “Our success is directly related to how quickly and easily people can interact with our site and view their matches,” says Owen Morley, director of operations at POF. “We have to be agile company wide and continually adapt to the market and our users’ needs.”
When its customers began to go mobile, for example, POF was quick to introduce a POF app for mobile devices. The company also instills a culture of innovation by conducting quarterly code sessions that enable developers to stretch their imaginations and foster new ideas.
What’s the company’s next move? POF is constantly on the lookout for faster storage to remove even tiny amounts of latency. Why? Because latency equals poor user experience. “Our IT staff tells me everything is already going incredibly fast,” says Morley, “and I tell them our goal is to go 20 times faster.”
Trailblazing in the connected economy
These companies, and others like them, never stop searching for ways to move forward in the connected economy. They succeed in large part by moving the relationship between IT and line of business to a new model based on collaboration and engagement.
Are you interested in learning more about succeeding in the connected economy? Check out the HBR report video and slideshare.
 Harvard Business Report – Analytic Services Report – THE ECOSYSTEM EQUATION: Collaboration in the Connected Economy; Sponsored by IBM