Harvard Business Review[QQ] The new meaning of quality in the information age Software applications are now a mission-critical source of competitive advantage for most companies. They are also a source of great risk, as the Y2K bug has made clear. Yet many line managers still haven’t confronted software issues – partly because they aren’t sure how best to define the quality of the applications in their IT infrastructures. Some companies such as Wal-Mart and the Gap have successfully integrated the software in their networks, but most have accumulated an unwieldy number of incompatible applications – all designed to perform the same tasks. The authors provide a framework for measuring the performance of software in a company’s IT portfolio. Traditionally, quality has been measured according to a product’s ability to meet certain specifications; other views of quality have emerged that measure a product’s adaptability to customer needs and a product’s ability to encourage innovation. To judge software quality properly, argue the authors, managers must measure applications against all three approaches. Capturing the real value in high-tech acquisitions Eager to stay ahead of fast-changing markets, more and more high-tech companies are looking outside for competitive advantage. Last year in the United States alone, there were 5,000 high-tech acquisitions, but many of them yielded disappointing results. The reason, the authors contend, is that most managers have a shortsighted view of strategic acquisitions – they focus on then specific products or market share. That focus might make sense in some industries, where those assets can confer substantial advantages, but in high-tech, it is full-fledged technological capabilities – tied to skilled people – that are the key to long-term success. Job sculpting: the art of retaining your best people Hiring good people is tough, but keeping them can be even tougher. The professionals streaming out of today’s MBA programs are so well educated and achievement oriented that they could do well in virtually any job. So will they stay with you? According to noted career experts Timothy Butler and James Waldroop, they will only if their jobs fit their deeply embedded life interests – that is, their long-held, emotionally driven passions. Authors Butler and Waldroop identify the eight different life interests of people drawn to business careers, and introduce the concept of job sculpting, the art of matching people to jobs that resonate with the activities that make them truly happy. www.hbsp.harvard.edu/products/hbr Winning in smart markets “Smart” markets, or markets defined by frequent turnover in the general stock of knowledge or information embodied in products and possessed by competitors and consumers, are based on new kinds of products, competitors, and customers. As a result, companies seek to understand the degree to which their own capabilities and motivations as information-processing “organisms” are crucial in enabling them to extract maximum value from their customer information assets. Firms that have gained a significant competitive advantage are distinguished by their ability to see beyond their IT infrastructure and view information itself as the core asset, and the management of information as the company’s main priority. Understanding how consumers are adapting their behaviour to the demands of an increasingly information-intensive environment has been a starting point for companies that have achieved success in smart markets. By observing the activities of these firms across industries, it is possible to identify generic strategies and develop a preliminary taxonomy, or categorisation scheme, that can be used to compare and contrast them. The placement of individual strategies within a conceptual framework guides managers in making customer-management decisions. Partnerships to improve supply chains The open exchange of information (for example, sharing cost and demand data) and coordinated decision making typical of a long-term supply-chain partnership can reduce the inefficiencies inherent in less collaborative relationships, such as excess inventories and slow response. Different from strategic alliances or project-based partnerships, supply-chain partnerships are characterised by levels of investment that further improve the joint supply chain to mutual advantage. The authors describe two joint supply-chain improvement projects, one of which led to logistics benefits and helped reverse a traditionally adversarial relationship that, in turn, translated into commercial benefits. The second project held the potential to quickly deliver logistics benefits, yet did not yield the expected commercial value. Portfolios of buyer-supplier relationships A survey on supplier relationships covering 447 managers from the major US and Japanese automobile manufacturers showed that these firms do not manage primarily by strategic partnerships, but instead participate in various types of relationships. The author proposes and empirically validates a framework for managing a portfolio of relationships that will help senior managers answer two key questions: Which governance structure or relational design should a firm choose under certain external contingencies? What is the appropriate way to manage each type of relationship? mitsloan.mit.edu/smr INFORMATION DIGEST SOON TO EXPAND Information Digest is always looking out for new information sources and we are especially keen to carry more vertical market research. We also want to know whether the research we currently supply is tailored to your needs. 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