I disagree somewhat with your first idea that the web and erp increase the impact of managerial innovations

The WEB & IT for sure can help spread & increase the impact of new ideas and ERP allows ideas to be tested and successful ones identified but…

I think that to increase the impact of managerial innovations (as well as IT) you need to find more REAL, GOOD & ACTUAL innovations – these stem from the total brainpower / group randomness brainpower of your talented team, tapping into and converting this is what i believe would have the biggest impact

IT propagates an idea, but it is the conceptual super idea that counts

You have an interesting argument that it’s possible to reduce the “friction” inherent in introducing new ideas or techniques to such large and disparate groups using two diametrically opposed approaches: 1) Embed what’s new as part of a discrete and non-discretionary process that can be replicated mechanically; 2) Use social software principals to make the benefits of new ideas, techniques – or just connections and working communication – more visible and actionable throughout an organization.

The first alternative works for transactional processes where variation is bad, the second for work where innovation, exceptions and knowledge work have the greatest value. Both require mangment skill and leadership to orchestrate. A nice combination!

A few more thoughts at http://traction.tractionsoftware.com/traction/permalink/Blog737

“We divided the U.S. private sector into 61 industries and determined the IT intensity of each one, essentially by calculating how much companies within each industry spend on computer hardware and software as a percentage of total spending on fixed assets.”

I have a small issue with this metric. You state that there are overall two different benefits of IT spending, internet-based and ERM products, that I would say buoy the standardization/consistency of the companyÂ’s process/products. But you donÂ’t separate this out. For instance, is there anything to be learned by companies that invested heavily in ERP, say a 3M company, but relatively doesnÂ’t spend as much on internet-based IT. Not sure if this affects you results, but at first glace the % fixed assets variable seems too broad to accurately segment. It doesnÂ’t take into account the labor vs. fixed cost ratio, labor intensive vs. non labor intensive industries. It may be OK, just looks weird. Anyhoo, leading my next pointÂ…

“Industries that consume a lot of information technology included those in both the services and manufacturing sectors—publishers and insurers, as well as makers of autos and machinery, for example. As a group, high-IT industries increased their technology investments sharply starting in the mid-1990s, pulling away from medium-IT and low-IT industries such as farming, real estate, rail transportation and utilities.”

At first glance, your “low-IT industries” tend to be government regulated or at least interfered with (farming, utilities). Thus claims of enhanced concentration ratio maybe are based on policies of protectionism vs. lack of IT spending.

“Second, some observers have argued that information technology is so pervasive that it no longer offers companies any big advantage. If many businesses in the same industry bought the same type of large-scale commercial-enterprise software, there is reason to believe they would subsequently become more similar, and the competitive field would level. Instead, something close to the opposite has taken place.”

I don’t know if I agree with your assumption on this assumption. I think that this statement is correct, but that companies becoming “similar” isn’t the physical companies themselves, but the playing field for a company’s ability to market, product, sell its product is now leveling off. For instance, take Coke and Pepsi. I would reason that with the emergence of enterprise systems, the ability of Coke and Pepsi to market their product is similar. Both accurately reasoned that its far more profitable to differentiate their business strategy, focus on their strengths, and change the strategic focus of their products vs. competing against each other head-on. Coke decided to focus on the soft drink category and increase share of stomach and Pepsi Co. now is head first with the “good for you” strategy. For instance, Diet Pepsi is now a bigger brand than Pepsi and both products are now just Cash cows, milked until unprofitable. It is because of ERP? Who knows, but I think this is why there is instability vs. companies becoming more physically similar with increased levels of ERP.

Anyhoo, hope this helps.

I quoted your post at http://evolutionofbpr.com/innovation-and-execution/

What is it that the successful companies are doing differently? It would seem like investing in technology is one part of the equation, where the investments are made is just as important, and at some point there is a corporate culture component.