MoneyWise-Topline and Bottom line

Information technology (IT) is today woven into our daily life. In a globalized economy, business life without informational technology driven applications would be impossible transforming information technology as a commodity. From a niche market, information technology has evolved into a commodity market. In order to sustain, information technology is envisaged to create value.  Today business with information technology is adopting bottom-line strategy to increase efficiency by reducing overall costs and top-line strategy to generate new revenue through new products and services.


According to Accenture report “India in 2012”, “sustaining high growth is likely to be the overarching concern in 2012, although the risk of inflation will remain, largely because of a weakening rupee”. With export as a revenue option to ease out the current volatility driven by agonizing price sensitive market, near zero value differentiators, continue placing downward pressure on production.  Given the scenario, business consolidation and optimization through the strategic use of information technology takes priority to sustain and exhibit top line and bottom line targets. Pillars of operational excellence, cost, quality and speed together address the organizational bottom line. It is evident that a delicate balance between cutting costs to survive today and investing on growth through a subtle balancing act is the way forward.  This discussion is centered on the segments of innovation, customer retention, and supply chain optimization.

The key to progress and growth, in the times of economic crisis, is innovation. IT driven Innovation enable organizations to address the costs, quality, time-to-market, productivity and increasing revenue growth. Strategic innovation to address the gaps present in the international business canvass, guides the organization through growth to address the revenue chart. At an organizational level interdependence of business and IT is cardinal to create new knowledge and products, harmonization of business to studiously compete and enhance its competitive position. This is all the more true due to the evolution of new organizational forms by way of restructuring and re-engineering to manage over heads, divest under performing business and gear up to challenge business dynamics leading to better bottom line.  Going by Prahalad’s analysis, IT aligns an organization to deliver to the taste and needs of an individual consumer. This is addressed through the emergence of network and spherical firms deviating from the classical pyramid oriented firm making enabling agility to address the dynamic demands. The effectiveness of the network organization lies in its flexibility, to respond and the ability to rearrange resources to meet the changing, unique needs of upstream and downstream partners, and create value. It is evident that information technology is pivotal to the success of network and spherical firms through the various complex agreements and IT driven delivery platforms.

Companies typically combine defensive approaches like improving operational efficiency, with offensive techniques like developing new markets, investing in new assets, or both to address the bottom line table. Classical examples include the success of Amazon, Sales force, all web delivery platforms and cloud services. Very few organizations understand the S curve controlling the top and bottom line and its implications. For example, the move of DoCoMo to position i-mode supplemented by agreements addressing a well charted gap has created business value taking DoCOMO through the S curve.  For example Amazon’s Kindle despite recession has shown a decent bottom line with Kindle leading the digital reading device market aspiring to redraw the educational market. A judicious mix of IT innovation built over Bigdata to identify sales and marketing gaps, leads the boardroom discussions.  With extended and expanded computer and communication functionality, an automobile has today emerged as computer-on-wheels similar to a multipurpose mobile handset. For example OnStar has innovatively transformed an automobile to a network of  interlinked services including automatic notification of air bag deployment, stolen vehicle tracking, medical network, emergency services, roadside assistance, remote door unlock, route support, concierge, and convenience services such as location of hotels, restaurants, gas stations and other points of interest. ATM is getting converted to provide value added services deviating from a simple bank ledger management.

Current market environment gauges, like shrinkage of markets, increased competition, technology frenzy, and diffusion of the IT, preempt organizational changes and their marketing channels. Business environment has reached a stage where customer attrition is addressed through metrics in the boardroom, and the fact of holding the customer becomes a challenge to the organization. Customer today is interested to get the service carried out rather than actually understanding who carries out the service. Loyalty and e-loyalty are considered as customer retention qualitative indicator of profitability in services. An extensive discussion on “Competing on Analytics” is presented by Thomas Daven port in Harvard business review drawing attention and triggering a series of new opportunities. Customer analysis models and measurements are addressed through IT systems and Big data networks as seen by the spurt of activities in Amazon, Google, yahoo and the open source movement on Hadoop initiatives. For example Monster, the career management giant, stuck with lead generation issues, recognized that its current media placements would no longer drive the growth it required and new alternatives was the way forward. Monster opted for IT driven Unica’s comprehensive interaction and campaign management solution tagged with Unica eMessage, and Unica PredictiveInsight, for data mining and predictive modeling. For example Xerago has successfully deployed customer value maximization across a cross section of industries worldwide. It is seen that information technology bridges the bottom line graph in the capacity of an enabler.

Published in ITNEXT
Author - IT for Management,Oxford Press