Leveraging Strategic Competitive Advantage for Growth
Today, it is common practice for companies to strive for the best IT security and infrastructure for strategic competitive advantage. This defines their business as a set of internal core competencies and multiple outsourced partners. The role of IT has also evolved to focus on sustaining a best-in-class network of partners and suppliers and maintaining the technical and operational flexibility to swap partners and suppliers as needed to maintain the strategic competitive advantage.
But there is a problem with this approach if taken too far. Many companies today value technical nimbleness over leveraging technology to enable a strategic competitive advantage. Technology becomes a commodity and cannot promote differentiation when there is no foundation. And without differentiation, a company is offering little strategic competitive advantage to customers. A lack of underlying strategic competitive advantage differentiation is one reason we see so many companies appear and disappear rapidly.
Strategic competitive advantage positioning is the creation of a unique value proposition, and it requires defining several critical aspects of a business:
- a unique market niche
- the critical activities a company will perform to differentiate itself and give a strategic competitive advantage
- how these key activities will relate to one another
- how they will execute said strategic competitive advantage
While operational effectiveness is about performing the same activities better than rivals, strategic competitive advantage is about performing different or similar activities in different ways, which together deliver a unique value to customers. What catapulted FedEx to phenomenal success was not its package-tracking technology, airline fleet, or the fact that all packages went through a central processing center giving FedEx its strategic competitive advantage. It was that combined that these activities allowed FedEx to guarantee overnight delivery.
How strategic activities interrelate is also fundamental to sustainable strategic competitive advantage. First, it would be tough for a competitor to outperform a mix of interrelated activities. Second, bottlenecks in one movement of an interlocked set create real pressure to improve all activities in the chain. And third, it is expertise in delivering a mix of activities that makes real economic value and leads to industry dominance. Dell is the perfect example of strategic competitive advantage.
So, how can you leverage your own IT organization for optimal strategic competitive advantage?
Identify the few key activities that differentiate you from the competition and form the strategic competitive advantage behind your organization's vision. Understand how they must interrelate and then focus on them.
Define the best way to deliver on strategic competitive advantage. This is the critical work of establishing synergistic business processes with the technology you have in place or plan to use. The most common reason why 70 percent of IT projects fail or fail to meet expectations is not the technology but the lack of compatibility between the technology and its use.
Also, remember that best-in-class business process rules, especially those that start and end with the customer, are your responsibility, not your integrator's. The importance of getting this strategic competitive advantage right cannot be overstated.
Make technology investments based on the solution's capabilities in your critical strategic competitive advantage activities. This may mean spending less in non-critical areas to afford best-of-breed solutions in each crucial strategic function. View enterprise-wide do-it-all solutions suspiciously unless you can invest heavily in customization.
Integrate the entire value chain and maintain your strategic competitive advantage over it rigorously. The last thing you want is a manual bottleneck at a feeder into one of your key strategic activities.
You now have created an interlocked set of business activities that support your critical strategic competitive advantage.
Be passionate about continuously improving your business’s strategic competitive advantage. If you stay focused on your key strategic competitive advantage actions, the question will never be whether a business process improvement will add value but rather which ones will bring about the most significant ROI.
Technology researchers believe that the capabilities of technology have surpassed the ability to incorporate those strategic competitive advantage capabilities usefully. Having unlimited computing power is now available and is now up to the companies how they use it. There will always be some level of financial constraints, but one of the constraints for businesses has become the skill needed to create strategic competitive advantage value on top of vast resources.
The significant change to shift IT from a cost center to a business partner is for IT teams to work alongside the business units as they build the systems together or as the IT team guides technology. The challenge for building strategic competitive advantage here is in building consensus. This requires some communication of technical details about the strategic competitive advantage to the business unit, and it also requires the IT team to work on the line of business priorities.
The Effects of Incorporating IT for Strategic Competitive Advantage
It is advancing towards the role of strategic competitive advantage. Strategic competitive advantage deals with IT evaluation and planning. With strategy-based IT, we now have a clearer picture of the number of investments needed to perform activities that will boost your IT business.
Another one of the functions of IT strategic competitive advantage is that it is changing the way companies operate, including features such as “value chain.” This system allows you to divide your values and activities depending on their feasibility and usefulness. It will enable you to thoroughly view and make changes in the business objectives, discuss consumption patterns within the business and make alterations.
The strategic competitive advantage deals with new and modern ways to modernize the structure of the competition. It makes all the activities a better fit according to the current campaigns created and published by the IT systems.