IT/Strategy Alignment Checklist: 4. Separate Table Stakes from Competitive Advantage

The challenge is separating computing capabilities that are absolutely needed just to stay in the game from the novel application of those same capabilities in ways that lead to competitive advantage. Innovation is born in the ability to do the latter.

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We are entering an age in which computing capabilities are being offered as a consumable commodity. Enabled through the widespread use of portable devices and availability of myriad cloud computing options, an on-demand, pay-as-you-go service model for IT is readily available for any organization to use.

Has the playing field been leveled? After all, computing innovation and horsepower are no longer strategic differentiators, when they can be acquired at will. However, here is where we as executive leaders must challenge conventional wisdom. There is quite a difference between fielding core business applications that support back office functions such as administrative support, accounting, and payroll and developing automated capabilities that drive product leadership, operational superiority, and customer allegiance.

Therefore, our challenge lies in the ability to separate those computing capabilities that are absolutely needed just to stay in the game (i.e., “table stakes”) from the novel application of those same capabilities in ways that lead to competitive advantage. Innovation is born in the ability to do the latter.

Here are examples of how existing computing technology capabilities are being used in innovative ways to drive differentiation:

Product leadership: Nike, Ford, and Apple are embedding computing devices and using apps to improve the features and functions of their products. You can track your workouts, find your misplaced iPhone, and reroute your commute using their products;

Operational Superiority: UPS, Walmart, and The Home Depot are using cloud computing capabilities to optimize delivery routing, restructure purchasing agreements, and streamline supply chain management into best-of-breed processes;

Customer Allegiance: Amazon and Netflix use cloud-based CRM capabilities to expose their patrons to specific products that may interest them and distribute those products in the format, and through the delivery channel defined by their customers.

Indeed, computing technology can be consumed as needed. However, the best enterprises can redefine the terms and drive innovation by applying technology in new and exciting ways—just like the best organizations did when IT was still in its infancy.

Editor’s Note: This is the fourth in a series of seven articles on IT/strategy alignment adapted from The Executive Checklist, by James M. Kerr. Click below to read other installments.

1. Define Where Technology Fits

2. Know What You Have

3. Learn What Is Available

5. Mind the Gaps to Reimagine the Future

For more information, visit www.executive-checklist.com.

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James M. Kerr // James M. Kerr is a partner at BlumShapiro Consulting in West Hartford, Conn., and a strategy thought leader who has worked with clients from both the carrier and vendor segments of the insurance industry.  His latest book, The Executive Checklist, is now available.  You can contact him at [email protected].

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