January 29, 2015

The Third Wave of IT - What Business Are You In?

The third wave of IT is already here, whether we actively utilize it in our businesses or not. The growth potential and risks should not be ignored, and a calculated decision must be made about internal factors that increase competitive advantage. This decision must also be communicated to customers.

In the near future, the business you are in will not look like it does today. All businesses are changing. Even my own – within the ICT industry -- is undergoing transformation.

ICT business is not ICT business anymore

The ICT business is defined as follows: "ICTs stand for information and communication technologies, which are defined (for the purposes of this primer) as a 'diverse set of technological tools and resources used to communicate, and to create, disseminate, store, and manage information'.”. This definition focuses on a more efficient use of the industry's tools and resources.

ICT has evolved from that definition, and in this new era, we need to focus on people and customers, which is what our CIO Kim Lindgren wrote in his Finnish blog post and Dell’s CIO Andi Karaboutis in Forbes Magazine.

Michael Porter calls this the “third wave of IT” in the Harvard Business Review.

The third wave of IT puts the service at the centre of everything. This means that IT does not simply implement different things, but also enables various service experiences in a wide range of services and products, with business bringing the products toward the centre of service.

How can better services be offered?

An updated focus on service means stringent requirements for the service platform, especially in regard to information security. The utilization rates on Cloud platforms (downtime per year) in many cases have approached 99.95 while the price trend has been favourable for customers. This means that delivery reliability has not bottlenecked in a long time.

When customers select Cloud platforms, their key decision-making factors can include the certainty that their platform will not be affected by political turbulence in the geographical region of operation, cyber threats, and the scalability of future business.

As a result of this service-oriented change, Cloud services have boomed over the last few years. For example 90% of Tieto's new service agreements contain Cloud components.

For households, many sources predict that 2015 will be the turning point for the third wave of IT (500 IoT domestic appliances in 2015.)

This lets us imagine a wide range of fantastic scenarios, but we should also consider what happens when the 'smarthome,' for instance, can no longer deliver on its promises. What if the home is used for denial-of-service attacks? This is a much more serious topic than whether your coffee maker can predict when you will wake up so it can brew a cappuccino five minutes later.

The third wave of IT is already here, whether we actively utilize it in our businesses or not. The growth potential and risks should not be ignored, and a calculated decision must be made about internal factors that increase competitive advantage. This decision must also be communicated to customers.

Anssi Pakkanen is the Director working in Telco, Media & Energy at Tieto. You can follow him on Twitter and find him on LinkedIn.

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