BTM Institute Unveils Breakthrough Business Technology Convergence Index
Five-Year Study Reveals the Connection between Convergence and Corporate Financial Performance
STAMFORD, CT: The BTM Institute, a nonprofit research think tank, announced the release of a new groundbreaking research report— Business Technology Convergence Index: The Role of Business Technology Convergence in Innovation and Adaptability and Its Effect on Financial Performance.
This report illustrates that companies that converge business and technology reap greater financial benefit than those with a less mature level of convergence. It is the most recent output following five years of ongoing collaborative research of the BTM Institute’s team of cross-disciplinary practitioners and academics from Harvard, the University of Oklahoma, Michigan State University and others.
The first study of its kind, the Index is supported by a real critical framework that measures the correlation of business and technology convergence and bottom line performance. It translates the current buzzwords such as “agility,” “innovation,” and “adaptability” into demonstrable actions that lead to better financial performance.
To download a copy of the full research report, please visit: http://www.btminstitute.org/pdf/Business_Technology_Convergence_Index_Final.pdf.
“The convergence of the business and technology aspects of an organization into an integrated, ‘whole-brained’ enterprise provides the connections necessary for innovation, resilience and agility,” says Faisal Hoque, Founder and Chair, BTM Institute and Chairman and CEO of BTM Corporation. “Leaders will find that this organizational maturity supports innovative thinking through carefully designed processes, rewarding measured risk-taking, and provides information architectures that serve as a knowledge base for building and testing opportunity scenarios. Convergence provides the enterprise with the platform to thrive during marketplace changes rather than just react to survive.”
The study examines Global 2000 corporations across 50 industries, such as UPS, Wal-Mart, and Starwood, and shows that working in the same environment as their direct competitors, enterprises with a more nearly converged business technology management exhibited superior revenue growth and net margins relative to their industry groups between 2002 and 2006:
* 12% average annual revenue growth vs. 4% for their industry groups
* 36% average annual earnings per share growth vs. 7% for their industry groups
Not only did these enterprises grow at a faster pace than did their peers, but they also exhibited consistently greater returns than those of their competitors, such as:
* 6% higher EBITD margins than those delivered by their industry groups
* 4% average higher return on equity
* 8% average higher return on assets
* 14% higher return on investments
Technology is a major expense in modern corporations and is deeply embedded in nearly every aspect of doing business. Moreover, it is the critical enabler of strategic imperatives – to be agile, resilient and innovative. This research further highlights that:
* Disruptive innovation creates new markets
* Evolutionary or sustained innovation creates great enterprises
* Adaptability allows rapid response to unforeseen changes
* Globalization enables extended enterprises, reinforcing their competitive edge
* The convergence of business and technology builds agile, innovative, extended enterprises
* Convergence relies upon repeatable, cross-disciplinary management capabilities
As the first study of its kind, the Index is built upon the BTM FrameworkTM and the BTM Maturity ModelTM and analyzes data across four organizational management functions, and then determines the correlation of business and technology convergence against bottom line performance.
Whatever the nature of the firm—whether a new hybrid or a large traditional organization—the management practices that create convergence can enable the firm to realize its strategic mission. As the Business Technology Convergence Index shows, success is the reward for those that achieve the higher levels of management maturity.
The Research Team
Members of the Convergence Index research team include Faisal Hoque, Founder and Chair of the BTM Institute, and Chairman and CEO, BTM Corporation; Dr. James I. Cash, Jr., Retired James E. Robison Professor of Business Administration, Harvard Business School; Michael Fillios, Chief Solutions Officer, BTM Corporation; Dr. Krishna Palepu, Senior Associate Dean for International Development, Harvard Business School; Dr. V. Sambamurthy, Eli Broad Professor of IT and Executive Director, Center for Leadership of the Digital Economy, Michigan State University; Dr. Robert Zmud, Michael F. Price Chair, University of Oklahoma; Terry Kirkpatrick, Editor in Chief, BTM Institute; and Joseph Mimms, VP of Executive Direction, BTM Corporation.
About The BTM Institute
Launched in 2003, the international, nonprofit BTM Institute is the first organization of its kind to bring together a select group from the academic, corporate, government and thought leadership communities as a multi-disciplinary research think tank to address the long-standing need to manage business and technology together. The Institute has established an extensive research agenda, produced major publications, and led the much needed and first ever collaboration among multi-disciplinary experts and academics. Through the BTM Institute’s various research and educational initiatives such as the BTM Academy (an executive development center), BTM Press (a management book publishing imprint), and the BTM Exchange (a peer-to-peer knowledge exchange), it is the group’s commitment to the industry to continuously advance global knowledge of Business Technology Management (BTM).
For more information on the BTM Institute, please visit www.btminstitute.org.
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