The Wastage of Internet and Technologies in Companies

The Wastage of Internet and Technologies in Companies

By Innovintergy Consulting

Originally Published March 22, 2010

It is difficult to think of a company that nowadays doesn’t use technologies. In one way or another technology is a part of our daily life, including businesses, some using it more than others. The most basic companies and does that run away from technologies will at least use electricity to power a light bulb and might have a phone. However this is not the rule, but rather the exception. Most businesses use technology massively, with computer systems and software that helps manage resources, sales (POS) and accounting. In the other end you will find companies that run on technologies and their operations would break down if you had to remove the technology factor.

Technology is a basic component of enterprises, although one can argue that penetration varies from company to company. In any case, most businesses consider technologies and the areas that provide them as support areas, almost alien to the organization. This included businesses where systems are vital and they don’t see technology areas as strategic ones, but as support ones. This is part of the classic management vision, something that is rapidly changing due to the fast growth of technologies and leveraged by the changes brought via Internet.

The way businesses are understood has dramatically changed in the last 15 to 20 years because of Internet. This medium has had a penetration no other medium has ever experienced before. Just in Latin America the official numbers talk of an Internet penetration of 30%, reaching a staggering 50% in Chile, 49% in Argentina and 45% in Colombia[1]. In North America the penetration has reached to 75%[2]. From any point of view these numbers are amazing and are prove of the social phenomenon that is Internet. This is a medium that cannot be dismissed, that has changed the way of life and it’s changing how businesses are made.

Currently and more so with the pass of time, the question has changed from “Do we create presence in Internet?” to “How do we create presence in Internet?”. Internet has become a necessity, almost a market requirement. For example, nowadays it’s unconceivable that a Bank lacks Internet presence and that it doesn’t allow its client to at least check the account balance online. However you can see how many Banks went online just to meet market demands. In other words, these Banks responded to the market’s minimum demands but didn’t consider the long run, thus enabling them to grow and offer additional services. There are relative few Banks that offer High Quality websites that help answer their customers or potential costumers’ inquiries, which is something as easy as providing clear information on how to open new products or being able to open them online. This is a problem that is not only seen with Banks, but with many type of businesses.

Something quite similar happens with technology on businesses. Very few companies have been empowered by the technologies and have made them a core component of the organization. When this technology empowered vision is present, every time the company updates its strategy and vision, technology is able to play an active and participative role, responding to the corporate needs. What usually happens is that technology changes with the organization’s needs, but a much lower pace, relegating itself from the rest of the company.

The main problem is that companies usually see Internet and Technologies as support areas. The company has a clear vision, a defined strategy and the “important areas” are aligned with them: top management, marketing, commercial, logistics and productions. However this lists rarely includes systems, technology and software development areas. This means that these areas, although they might be important, are not strategic but instead are support areas. Having this classic vision was fine some years ago, but with the speed the world is moving this vision has to change. All technology related areas must start to be seen and act as strategic areas, completely aligned with the company and that are able to respond the same way areas like marketing do.

Technical areas, as part of their sync with the strategy of the company, must learn to speak “management language”. These areas are responsible for the current and future state of the organization, and that’s why they must be part of the company’s main team. They must be active leaders when it’s time to propose new solutions, since these are areas that have a complete vision of the company.

When technical areas are included in corporate decisions, they will start to be responsible for the same objectives as other areas: cost reductions, more income and more clients, among others. And these objectives are no different from the ones sought by other organizations, being objectives almost natural for the technical areas, except that previously proposals on these fields came from other areas. Great savings and increase on income is a natural responsibility of the technicians, since they can be achieved via technology and especially Internet.

A very simple example where costs saving decision can be seen is when organizations decide to reduce paper consumption, a decision that many times is not proposed by the technical areas. This change requires the complete support of the technical areas, but this proposal is usually submitted by other areas. For example, Marketing might be responsible for this proposal as a way to increase corporate responsibility. Now, what are the implications of such a decision? According to a study held by the European Union[3], companies that have stopped printing invoices and are creating them by electronic means are saving 2 Euros per invoice. This is a huge saving, if you take into account the large number of companies that print an invoice for thousands of customers on a monthly basis. Something to take into account.


Strategic and Tactical Use of Internet and Technologies

Strategic and Tactical Use of Internet and Technologies

When organizations start seeing their technical areas as part of their corporate strategies, they can take great advantages. With this vision, any technological endeavor and Internet development will benefit the whole company, working for wide objectives and values. This will be a whole new company, with a greater number of people engaged and working on bigger and more ambitious projects.

From this point on we’ll be working with an example. Acme Delights (AD) is a company that currently has 5000 direct employees and produces all type of candy, soft beverages and fast foods. AD has direct presence in 8 Latin American countries, some just as distributor and in others also as producer. Recently the company was acquired by a French organization that has defined 3 strategic goals: reduce costs in 5% in one year, increase sales in 8% in one year and go into 3 new foreign markets within 2 years. They have stated that they won’t fire anyone, in fact that if needed, personnel can grow up to 10%. The quality of the products must also stay the same.

DA has many information systems that helps the company with production, providers, sales, financial and accounting control, among others. However the systems department has always been seen as an outsider that supports the company and plays a secondary role. This area responds to the requirements requested by other areas but is not proactive, having perfectly understood its role on the organization. For this reason, executives are worried by the role being played by the systems area, since they believe this area is a key factor to the situation they are facing.

If the systems area continues to play the same role, nothing new will happen. The other traditional areas will have to see how they can reduce costs and later tell systems what they have to do in order to comply with the new directive. The role played by the systems area will be totally reactive and responding exclusively to the requirements requested by other areas.

When this vision is modified and systems becomes a strategic area results will be drastically different. Systems will change form a passive, quiet, reactive role, to an active one where decisions are taken with the other areas of the company. Furthermore, its knowledge of the business (not as profound as maybe other areas) plus the fact that they work with all the areas of the company, leads them to have a privileged view of the company. The people from this area can start to propose new and creative solutions, knowing for example what is being done in Internet by others and how these proposals could affect the company. If this area compromises with the corporate vision, it can take the company to new bearings.

Continuing with the example and assuming that the systems area had a change of role, the 3 objectives proposed by the French parent company can be accomplished with proposals submitted by this area. The company has many computer systems, but now with the active participation of this area new proposals can be made and that have not been identified by other areas because it’s not their responsibility. Among others, they can propose new systems and upgrades, a better physical infrastructure (better hardware and networks) and better communications with providers, distributors and other via Internet. These proposals are not the result of one day of compromise of this area, but is probably something they new way back. However since they use to be a support area, no one had asked them to actively participate.

One of the ways to accomplish these 3 objectives is to use Internet on a strategic fashion. Systems have already proposed to use Internet to communicate with providers and distributors. In fact this one of the areas where Internet can be of great value and help enterprises reduce costs and optimize operations, except that this is usually missed, as companies believe that Internet is exclusively for sales and marketing. The truth is that Internet can and must be used by every area of the company, including financial, legal and logistic areas, creating real solutions that go beyond the usual email applications.

Now for the traditional use of Internet by marketing and sales and the addition of the systems area, the company will be able to create a great development to be used to enter the new markets. Many websites lack strategies and are not aligned with corporate vision. That is to say that Internet is seen as another medium but not necessarily aligned to the corporate strategy. When it is aligned, this channel can be better used and taken advantage, just as a company does with a physical (brick-and-mortar) store or an office, seeking the same corporate objectives. The company must also know who the Internet users are and how they relate to different situations, something that many times is unknown.

Every letter, image, video or element on a webpage must have justification. If this is not the case, the Internet presence is not responding to the needs of the company. This used to be the case at DA and they’re working on changing this vision to obtain greater benefits. With this new vision it is seen that marketing can use Internet for all their campaigns, so executives instruct marketing to work with systems any current and future campaign.

When the systems area proposal is supported the company will be able to enter the 3 new markets with an Internet strategy that is much cheaper than the traditional market strategy. Instead of spending thousands or millions of dollars on publicity on traditional media like TV, radio and press, a similar and much cheaper Internet campaign can be devised. For example, a high quality and striking webpage can be created, aligned to the corporate strategy with high value for the clients and with advertising on this media. However this doesn’t imply that traditional media is not used at all, because it can be used as complements to the Internet strategy.


The corporate vision that is proposed on this paper can be something natural for some companies; however most will see this as something big and traumatic. This is not entirely true, because the change is not as big as might be seem. The systems area and the developments they create have always served the company, except that they have been supporting and not main actors. The change is just to tell these areas that the company wants to use them better, be more compromised with the company’s activities and that the company desires a greater return on the money invested on these areas.

Internet with its great boom will surely be the breaking point to start this transformation. When the question is “How do we create presence in Internet” and the answer is “In the best possible way”, technical areas start to play a major, strategic and tactical role. In the same way you wouldn’t want your company’s products being produce by inexperienced hand, you want to have the best for the development of Internet and that is why systems and technical areas must play an active role. And since the objective is not to have an Internet presence just to say you have it, this presence must answer the corporate objectives.

The world is changing at amazing speed and with Internet it is being said that we live in exponential times. However it is still time to make this changes and doing them before your competition. It is time for companies to give the best they have, investing in technology and Internet and by doing this, establishing guidelines and standards for the market and business sector. But the changes have to take place now, because today is not too late but the same thing can’t be said about tomorrow.


[1] Several Sources. Internet World Stars.

[2] Id.

[3] Source: Muy Pymes, El uso de las TIC contribuye a reducir costes,