Continuing on from Part 1, we will look at one way to analyse your business with a view to creating your company roadmap, and hence forming the basis of your IT Strategy.
S-Curves are a common way to track the uptake of new products or technologies and form a small, but key, part of a Technology Life Cycle. While these may appear complicated concepts at first, there are a couple of simple points to extract from them:
- An S-Curve shows how market saturation for a new product occurs over time, from zero saturation at time zero, to a saturation maximum at some point after.
- Typically, this uptake does not follow a straight line, but an S-Curve, with low adoption rates in the early stage, fast adoption in the main growth phase, and low adoption again as subsequent market saturation occurs.
- The period with greatest profit potential is the growth phase: initial R&D effort and/or technical hurdles have been overcome and sales revenue should significantly outweighs costs.
Your business is probably exposed to multiple S-Curves on its inputs side (i.e. costs) and hopefully creates new S-Curves of its own on its outputs (i.e. sales). These can be mapped directly to your value chain, where each activity that your company does fits some part of that chain.
Analysing every input and output of your business and determining its place on its associated S-Curve will allow you to build up a good picture of the efficiency of your business, and where cost savings or increased revenues can be found.
Richard Kingston, IT Director, CounterBooks
Read Part 1