Using IT as a Competitive Weapon

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Using IT as a Competitive Weapon

• November 5, 2004
• Mohammed Haque
• Kirk Garten
• Tom Webb

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Using IT as a Competitive Weapon Agenda

• Theories of the tools or Levers for
  Competitive
• Advantage that are afforded by IT
• Case Studies of IT Applications Weapons that
  hit
• their targets!
• How is the weapon transformed? Are silicon
• chips and system analysts sufficient as
  weapons?

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Using IT as a Competitive Weapon

• Weapons are tools for winning wars.
• Business is a war.
• Therefore, business needs weapons to WIN.
• (With sincere apologies to Plato and his theory
  of logic.)

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Using IT as a Competitive Weapon

• Is it fair to compare warriors to managers?
• Terminology of War Battles, strategies, tactics,
• resources, alliances, costs, and weaponry.
• Winning or Losing Outcomes matter, with
  terminology measuring the escalation to victory,
  defeat, destruction, dynasty, even failure or
  death.

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Using IT as a Competitive Weapon

• We have two purposes
• Review theories of IT that bear on its important
  role in business to help create competitive
  advantage, perhaps even sustained CA. We will
  support these with four case studies from recent
  publications.
• Analyze more fully how IT actually becomes a
  weapon. That is, what must happen to transform
  the resources into weapons? Under what
  circumstances can competitive advantages be
  gained by the use of IT?

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Using IT as a Competitive Weapon

• Theories of IT
• The Resource Based View1
• Attributes
• Value Imitability
• Rarity Substitutability
• Appropriability Mobility
• 1 Wade, Michael, and Hulland, J., The Resource
  Based View and IS Systems Research Review,
  Extension, and
• Suggestions, MIS Quarterly, Vol. 28, 1,
  March 2004.

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Using IT as a Competitive Weapon

• Theories of IT2
• Transaction Cost Theory
• Economic model that assists managers in
  determining the most effective strategies for
  maximizing profits.
• What should we make? vs. What should we buy?
• 2 Williamson, O., Comparative economic
  organization The analysis of discrete structural
  alternatives, Administrative Science Quarterly,
  36 1991, pp. 269-296.

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Using IT as a Competitive Weapon

• Theories of IT
• Core IS Capabilities for Exploiting IT3
• Flexible Arrangements are Key
• IS functions best when a relatively small
  number of people with core capabilities protect
  and maintain the businesss ability to exploit
  new developments in IT.
• 3 Feeny, D. and Willcocks, L., Core IS
  Capabilities for Exploiting Information
  Technology, Sloan Management Review, Vol. 39,
  Spring, 1998, p. 20.

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Using IT as a Competitive Weapon

• Theories of IT
• Porters Theory of Competitive Advantage4
• Information technology affects competition
  when it
• Changes industry structure and alters the rules
  of competition.
• Creates competitive advantage by creating new
  ways to outperform rivals.
• Generates whole new businesses often from within
  a firms
• existing operations.
• 4 Porter, Michael E. and Millar, Victor E., How
  Information Gives You Competitive Advantage,
  Harvard Business Review, July-August, 1985, pp.
  1-3.

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Using IT as a Competitive Weapon

• Theories of IT
• Porters Key Concepts - IT Leading to CA5
• First, Porter identifies value activities, the
  distinct elements of work involved that are
  either technologically or economically
  distinctive in performing its business
  activities.
• Then he shows that Information Technology can
  lower the costs in every one of the nine Primary
  and Support Activities of the value chain.
• 5 Porter, Michael E. and Millar, Victor E., How
  Information Gives You Competitive Advantage,
  Harvard Business Review, July-August, 1985, pp.
  3-6.

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Using IT as a Competitive Weapon

• Theories of IT
• Porters Theory of Competitive Advantage6
• Information technology affects competitive
  advantage
• By lowering costs within the value chain,
  thereby enhancing the companys competitive
  position within its industry, and
• By expanding the companys ability to
  differentiate its products or services from its
  rivals.
• 6 Porter, Michael E. and Millar, Victor E., How
  Information Gives You Competitive Advantage,
  Harvard Business
• Review, July-August, 1985, pp. 9-10.

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Using IT as a Competitive Weapon

• Four Recent Case Studies
• in which IT has produced competitive advantages.
• Avnet Corp. Vanguard Group
• Smurfit-Stone Walgreens Corp.

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Using IT as a Competitive Weapon

• Critical Differentiation
• The defining characteristic of a competitive
  weapon
• In each case study, the company uses IT to
  provide a distinct advantage that appeals to its
  customers.
• By applying IT solutions to its business
  processes, each company separates itself from its
  rivals.
• Target hit! Advantage our side!

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Using IT as a Competitive Weapon

• Avnet is a distributor of electronic components
  and computer products to industrial customers
  worldwide. The Company also distributes a variety
  of computer products to both end users
  resellers. For the FY ended 7/03/04, sales were
  10.24B.7
• __________________________________________________
  __________________________________
• Erased multiple ERP systems within its divisions,
  ridding itself of an information-management and
  propagation problem, said Bill Chapman (CTO).
  New software layer allows supply chain management
  to flow at a pace that gives customers order
  pricing within 20 minutes instead of up to half a
  day. Linking its ERP to the ERPs of key business
  partners, especially some smaller players without
  internal IT resources, increased transaction
  speeds to long dreamed-of levels.
• 7 http//personal.fidelity.com/research/stocks/con
  tent/stocksindex.shtml, viewed November 1, 2004.

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Using IT as a Competitive Weapon

• Avnet
• __________________________________________________
  _
• CRITICAL DIFFERENTIATOR/BENEFIT TO CUSTOMERS
• Contribution is CRITICAL because the
  painstakingly redesigned IT architecture allows
  faster business processes that enable
  collaboration with customers. Additionally, by
  providing entrée to Avnets own ERP, its
  customers dont have to change their business
  processes and systems to communicate with us,
  says Bill Chapman. Its about doing business
  their way.8
• 8 Foley, John, Avnet Greases Supply Chain,
  Information Week, September 20,
• 2004, p. 38, p. 90.

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Using IT as a Competitive Weapon

• Vanguard is the number two mutual fund company
  behind Fidelity, but is closing the gap, claiming
  over 725 billion in assets under management.
  Vanguards fund options include over 100 stock,
  bond, mixed and international offerings. Its 2003
  sales are estimated at 2.044 billion, a growth
  of over 30 from the year before. 9
• __________________________________________________
  ____________________________________
• Innovative Vanguard uses IT to stay one step
  ahead of the competition by
• Making the jump years ago to herd inquiries to
  its strengthened Web site and away
• from its call centers. A large IT investment
  in Wave client-service desktop, allows
• customer-service associates to quickly assist
  phone-in clients.
• Creating the on-line One Step program, which
  promotes increasing additional
• contributions by individuals as long as
  possible. Vanguard has enrolled nearly 11,000
• new clients in the past 6 months.
• IT brought deeper assistance to Vanguards
  business processes by enabling changes
• to applications in Web access, financial
  advising, CRM, and payroll software.
• 9 http//www.hoovers.com/vanguard-group/--ID__433
  21--/free-co-factsheet.xhtml, viewed November 19,
  2004.

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Using IT as a Competitive Weapon

• Vanguard
• __________________________________________________
  _____________
• CRITICAL DIFFERENTIATOR/BENEFIT TO CUSTOMERS
• Vanguards IT investments have helped create a
  most user-friendly website with notable
  revenue-enhancing capabilities. Putting
  easy-to-use tools in the hands of its customers
  helps them analyze their own needs and
  risk-tolerance, shift funds to more appropriate
  categories, and convert non-Vanguard 401-K funds
  into Vanguard IRAs. These unique customer-focused
  approaches are all IT-driven and support the
  companys basic success strategy Low cost funds,
  high customer satisfaction, revenue-enhancing
  products all aimed at the retirement goals of
  Americans. 10
• 10 Information Week 500, Banking Financial
  Services, Information Week, September 20, 2004,
  pp. 67-68.

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Using IT as a Competitive Weapon

• Smurfit-Stone Container Corp. is the industry's
  leading integrated manufacturer of paperboard and
  paper-based packaging. Smurfit-Stone is the
  leading producer of containerboard, including
  white top linerboard corrugated containers and
  more. Annual sales are 7.7 billion. 11
• __________________________________________________
  _______________________________
• Among many IT driven innovations, SSCC broke a
  century old hindrance, the plant-centric model
  of operating. This meant that the sales force
  and plant manager/capabilities determined how the
  market was served. Plants never shared jobs. Now
  they work as a network to produce the variety and
  quality and volume of items needed by a larger
  purchaser. The CIO showed how IT could allow
  plants in a region, or a metroplex, to share
  major jobs. Data management and new programs
  were required to allow inter-plant information to
  be shared, allowing sales reps to make the output
  potential of all plants in one region appear to
  be one single source to help the client. Smoothed
  and sped customer ordering, thus benefiting SSCC.
• 11 http//personal.fidelity.com/research/stocks/co
  ntent/stocksindex.shtml, viewed October 29, 2004.

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Using IT as a Competitive Weapon

• Smurfit-Stone Container Corp.
• __________________________________________________
  ____________________
• CRITICAL DIFFERENTIATOR/BENEFIT TO CUSTOMERS
• IT helps Smurfit build a better relationship
  with its clients, says CIO Burdiss. By
  pioneering a regional approach to the
  sales/production process, Smurfit was able to
  satisfy large customers orders with one sales
  call. For over a century prior to this
  IT-enabled breakthrough, the Plant-centric
  model dominated the packaging materials industry.
  That is, each separate factory had its own sales
  force, specialty lines, and production schedules.
  IT demonstrated innovative capabilities that
  permitted data management coordinate inter-plant
  information to be shared, thus enabling SSCC to
  be seen as critically different and more
  appealing to large clients.12
• 12 Jim Burdiss, CIO, Smurfit-Stone Container
  Corporation, interviewed by phone by Thomas Webb,
  October 28, 2004.

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Using IT as a Competitive Weapon

• Walgreens is principally engaged in the retail
  drug-
• store business. As of 8/03, Walgreens operated
  4,224 retail drug-
• stores and three mail service facilities in 44
  states Puerto Rico.
• For the FY ended 8/31/04, net sales were
  37.51B.13
• __________________________________________________
  ______________________
• Walgreens identified convenience and high profit
  per customer transaction as its core strategy for
  success in the early 1970s. With a substantial
  investment of over 400 million for a satellite
  communication system, called Intercom, it built
  a true corner drugstore that is still unique.14
  When confronted with the opportunity to compete
  with Drugstore.com via internet sales, Walgreens
  sat back and did nothing Until it could do it
  better. The result even more convenience for
  customers with no loss of professional service.
• 13 http//personal.fidelity.com/research/stocks/co
  ntent/stocksindex.shtml, viewed October 29, 2004.
• 14 Collins, Jim, Good to Great, HarperCollins,
  New York, 2001.

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Using IT as a Competitive Weapon

• Walgreens
• __________________________________________________
  ____________________
• CRITICAL DIFFERENTIATOR/BENEFIT TO CUSTOMERS
• By investing heavily in IT, Walgreens became even
  more convenient to its customers. If, while on
  vacation in Boise, you need your prescription
  refilled, the corner Walgreens there will have
  your records from Sheboygan in seconds. How? By
  using the power of its enormous database together
  with the speed of its sophisticated satellite
  data delivery system, working together as
  Intercom Plus. This customer-focused
  differentiator is unmatched by any other company
  of its kind in the world.15
• 15 Collins, Jim, Good to Great, HarperCollins,
  New York, 2001.

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Using IT as a Competitive Weapon

• Allowing for the probability that Porter,
  Willcocks, Wade, et. al. provide well-conceived
  analyses that describe ITs basis as a
  Competitive Weapon,
• We nevertheless conclude that
• Information Technology is NOT a competitive
  weapon.

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Using IT as a Competitive Weapon

• Let us quickly add some definitions and some
  qualifiers to that!
• What is a weapon?
• Definition 1. device designed to injure or kill,
  2. something used as a way of getting an
  advantage in a situation16
• 16 http//encarta.msn.com/dictionary_/weapon.html,
  viewed October 27, 2004.

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Using IT as a Competitive Weapon

• Is a 50 caliber machine gun a weapon?
• Under the first definition it is, however
• It is merely an asset of questionable value if it
  is lying in the mud, sitting broken on a shelf,
  or put into the wrong hands.

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Using IT as a Competitive Weapon

• Q How does that gun become a weapon?
• A When it is used in combination with
• Skilled human talent, trained to use it
• Proper maintenance
• A well-conceived strategy, one aimed at success

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Using IT as a Competitive Weapon

• IT, by itself, is like that machine gun
• It is an asset. Granted, it is an elegant,
  complex network of silicon, software and wiring,
  supported by professionals
• But IT alone is not a weapon!
• Unless it is

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Using IT as a Competitive Weapon

• used precisely and intelligently in support of
  an enterprises strategy of successful business
  processes.
• We believe Information Technology arguably can be
  the most effective modern business weapon, when
  used to support well-executed business processes.

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Using IT as a Competitive Weapon

• Today IT is an indispensable element of
  business weaponry.
• CEOs (Generals) direct the business and employ
• Strategy the broad set of plans and directions
  that guide the business
• toward its goals.
• Creativity the ability to innovate and
  willingness to commit to finding new
• ways of achieving advantages over competitors.
• Discipline The strength to stick to rational
  methods, to conserve resources,
• and to enforce the execution of these concepts.
  

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Using IT as a Competitive Weapon

• The CIO, the chief IT strategist, must manage,
  train, and motivate the human talent - the troops
  using
• Training The right knowledge imparted to the
  right people in the
• right roles.
• Intelligent Innovation A culture of continual
  process innovation and
• strategic creativity.
• Resource deployment Efficient use of the right
  resources put into
• play in support of the fundamental business
  processes.

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Using IT as a Competitive Weapon

• Whether resources are examined using the Resource
  Based View, the Transaction Cost Theory, or any
  other framework of IT analysis,
• the key to gaining competitive advantage using
• IT resources is simply this
• Put them to effective use in support
• of the businesss strategy for success.

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Using IT as a Competitive Weapon

• KEY SUCCESS FACTORS17
• Top Executive Engagement
• IT and Business Strategy Alignment
• IT Governance
• Application Delivery and Management
• Selective Outsourcing
• Vendor Management
• Talent Management
• Business Enablement
• 17 Key Attributes of the World-Class Information
  Technology Organization, A Competency Diagnostic
  Tool, from the Working Council for Chief
  Information Officers, of the Corporate Executive
  Board, distributed by Jim Burdiss of
  Smurfit-Stone Container Corporaton.

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Using IT as a Competitive Weapon

• Top Executive Enthusiasm
• Studies show that unless the leadership of the
  organization are fully committed, enthusiastic,
  and engaged in the IT process, and especially in
  major projects, the organization will likely not
  benefit from the investment in IT. The
  commitment has to be seen by the entire
  organization as important and worthy of the extra
  effort and sacrifice to make it work.
• Support from senior non-IT Executives, third in
  2003, was ranked number one by both IT and non-IT
  executives in 1993-1997.18 This highlights the
  need for business executives to be aware of, and
  supportive of, technology innovations. Support
  means that business executives
• Recognize the value of information technology,
• Define and communicate the vision and strategies
  that include a role for IT, and
• Serve as active sponsors and champions for IT
  projects (provide leadership and funding).
• 18 Luftman, J., and McLean, E., Key Issues for
  Executives, MIS Quarterly Executive, Vol. 3, 2,
  2004, pp. 99-100.

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Using IT as a Competitive Weapon

• Top Executive Commitment
• Clearly, the CIO needs to seek solid support
  from the CEO and others in the C-suite. More and
  more, business executives recognize that they
  need to be more engaged in IT projects. Its the
  only way that IT can be taken seriously, from top
  to bottom. 19
• 19 Jim Burdiss, CIO, Smurfit-Stone Container
  Corporation, interviewed by phone by Thomas Webb,
  October 28, 2004.

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Using IT as a Competitive Weapon

• Top Executive Engagement
• Clear indication that the elite performing
  companies in the good-to-great study attach the
  highest priority to top executive engagement in
  support of initiatives
• Indeed, one of the crucial elements in taking a
  company from good to great is somewhat
  paradoxical. You need executives, on the one
  hand, who argue and debate sometimes violently
  in pursuit of the best answers, yet, on the
  other hand, who unify fully behind a decision,
  regardless of parochial interests.20
• 20 Collins, Jim, Good to Great, HarperCollins,
  New York, 2001.

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Using IT as a Competitive Weapon

• Collins research into good-to-great companies
  reveals what high performers think about
  technology in general and about IT
  specifically...
• Technology used as accelerator of momentum
• A core finding was that the Good to Great
  companies used technology as an accelerator, or
  enabler, of momentum, of increasing performance.
  While all of the good-to-great companies
  possessed technological sophistication, it was
  never any technology per se, that was responsible
  for their excellent performance. Rather, it was
  the pioneering application of carefully selected
  technologies that made the difference.
• Use of Technology, specifically IT, useful only
  when strategically used
• A fundamental concept discovered in all
  eleven companies was called the Hedgehog
  Concept by Collins and his researchers. By this,
  they mean a single organizing idea, a basic
  principle or concept that unifies and guides
  everything. By taking one simple concept and
  doing it with excellence and imagination, these
  companies succeeded brilliantly in a world made
  far too complex by faddists, futurists, and fear
  mongers.

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Using IT as a Competitive Weapon

• IT as Enabler via IT/Business Strategy Alignment
• The 3rd-ranked of the eleven Good To Great
  companies is Walgreens, which
• developed SCA and maintained from 1975 through
  today. How did it proceed?
• First, re-defined business success strategy.
  Most convenient drugstore in its markets with
  high profit per customer visit Simple concept
  and doable.
• With fanatical consistency it set about to put
  stores in every conceivable convenient location,
  sometimes moving stores a half-block to get a
  corner lot, other times, putting in up to six
  stores in a square mile in a downtown population
  center.
• Walgreens also went about revamping its product
  lines to provide high-convenience/high-profit
  services (one-hour photos) and products (food
  items, cosmetics).

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Using IT as a Competitive Weapon

• IT and Business Strategy Alignment
• The most important element in the transformation
  of IT into a competitive weapon is the alignment
  of IT with the business strategy. While simple
  in concept, it is really very hard to
  accomplish. 21
• 21 Jim Burdiss, CIO, Smurfit-Stone Container
  Corporation, interviewed by phone by Thomas Webb,
  October 28, 2004.

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Using IT as a Competitive Weapon

• IT and Business Strategy Alignment
• IT plans linked to business plans, ranked
  fourth in importance in a major study of
  IT/business alignment enablers and inhibitors.
  This finding demands that IT participate in
  creating business strategies and that the
  business participate in creating IT strategies.
  Both IT and non-IT executives need to see the
  benefits of mutual cooperation and of a close
  working relationship in the strategy formulation
  process But the participation needs to be
  frequent and both IT and the business need to
  listen to each other, communicate clearly, and
  learn to leverage IT resources to build
  competitive advantage.22 Having linked plans
  include
• Defining and supporting an effective IT
  governance process,
• Establishing binding IT-business partnership,
  relationship trust,
• Effective marketing of the value of IT,
• Sharing of knowledge to get the job done,
• Having access to appropriate people, and
• Effective use of IT to business liaisons.
• 22 Luftman, J., and McLean, E., Key Issues for
  Executives, MIS Quarterly Executive, Vol. 3, 2,
  2004, p. 100.

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Using IT as a Competitive Weapon

• IT Governance
• How does Governance enforce alignment with
  strategy?
• IT Governance establishes basic ground rules
• Who provides input regarding decision-making?
• Who makes the decision?
• Who pays for the project?
• Who does the implementation?

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Using IT as a Competitive Weapon

• IT Governance
• How does Governance impact an organization?
• IT Governance is the responsibility of senior
  management and business unit leaders to insure
  that
• ITs projects and investments are aligned with
  the business strategy that IT delivers the
  functionality and services in line with the
  organizations needs.
• IT brings new technologies that will enable the
  organization to do new things that were never
• before possible.
• IT-related services and functionality are
  delivered at the maximum economical value and in
• the most efficient manner. In short, the
  firms resources are used responsibly.
• All risks related to IT are known and managed,
  and that ITs core resources are secured.

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Using IT as a Competitive Weapon

• IT Governance
• Critical Success Factors from Control Objectives
  for IT (COBIT) from the IT Governance Institute
  illustrates how governance provides discipline
  and supports business/IT alignment23
• IT governance activities are integrated into
  the enterprise governance process and leadership
• behaviors
• IT governance focuses on the enterprise goals,
  strategic initiatives, the use of technology to
• enhance the business, and on the availability
  of sufficient resources and capabilities to keep
• up with the business demands
• IT governance activities are defined with a
  clear purpose, documented, and implemented,
• based on enterprise needs and with unambiguous
  accountabilities
• Management practices are implemented to
  increase efficient and optimal use of resources
  and
• increase the effectiveness of IT processes
• Organizational practices are established to
  enable sound oversight a control environment/
• culture risk assessment as a standard
  practice degree of adherence to established
• standards monitoring and follow up of control
  deficiencies and risks
• Control practices are defined to avoid
  breakdown in internal control and oversight
• There is integration and smooth
  interoperability of the more complex IT processes
  as problem,
• change, and configuration management

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Using IT as a Competitive Weapon

• Application Delivery Management
• IT organizations benefit by basing project
  management and application delivery/management
  processes on best in class standards. High
  quality, cost-effective applications result when
  standards are based upon
• Software Engineering Institutes Capability
  Maturity Model (CMM)
• Project Management Institutes Project
  Management Book of
• Knowledge (PMBOK)
• ISO 900X processes and other quality management
  methodologies

43
IT as a Competitive Weapon Application Delivery
ManagementProcess improvements will result
from use of SEI CMM standards.24
24 Rifkin, Stan, Founder and Principal, Master
Systems, Inc., Climbing the SEI maturity model
makes a difference on software projects,
presented at the International Conference of the
Israel Society for Quality, Jerusalem, November
1996.
44
IT as a Competitive Weapon Application Delivery
ManagementProcess improvements will result
from use of SEI CMM standards.25
25 Rifkin, Stan, Founder and Principal, Master
Systems, Inc., Climbing the SEI maturity model
makes a difference on software projects,
presented at the International Conference of the
Israel Society for Quality, Jerusalem, November
1996.
45
IT as a Competitive Weapon Selective Outsourcing

• A competitive, effective IT organization
• knows its strengths and weaknesses,
• plays them to its advantage through selective
  outsourcing.
• Leadership must identify its core IT
  capabilities, which include
• IS/IT leadership business systems
  thinking relationship building
• architecture planning informed buying
  vendor management
• contract facilitation contract
  monitoring ability to make it work
• These nine core IS Capabilities are required to
  underpin the pursuit of high-value-added
  applications of IT and to
• capitalize on the external markets
  ability to deliver cost-effective IT services.26
• Once an IT organization has determined its core
  IT capabilities, its leadership must face the
  challenges of deciding what
• to outsource and what to keep in-house.
  These decisions are based on proprietary business
  and/or technical
• knowledge, the current IT organizations
  business and technical knowledge, and total cost
  of the project.

46
Using IT as a Competitive Weapon

• Selective Outsourcing
• The analysis of whether to outsource is about
  value. Will the company realize significant
  value from the decision to outsource? And will
  it be able to manage and leverage that value to
  maintain or improve its competitive position?
• If the decision will not result in increased
  value or cost reductions, or if it will not
  provide some other significant benefit, then
  outsourcing is not a good choice.

47
Using IT as a Competitive Weapon

• Vendor Management
• When an IT organization decides to outsource, it
  must effectively manage the vendor relationship
  to insure it receives value for its investment.
  It is through
• Informed Buying
• Contract Facilitation
• Contract Monitoring
• Service Level Agreements and
• Vendor Development
• that the IT organization holds its vendors
  accountable, and assures that it will receive
  value from the outsourcing agreement.27
• 27 Feeny, D. and Willcocks, L., Core IS
  Capabilities for Exploiting Information
  Technology, Sloan Management Review, Vol. 39,
  Spring, 1998, pp. 14-15.

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Using IT as a Competitive Weapon

• Talent Management
• Retention of its core IT knowledge base is
  critical, in the long run, for the business it
  must protect its assets first, and then build
  upon the business core IT capabilities.
• IT Staff Development (IDPs, PIPs, training)
• IT Leadership Development
• IT Performance Management (incentives tied to
• fulfillment of strategic goals)
• Selective use of vendor expertise to sharpen
• existing staffs skills and to obtain new
  skill sets

49
Using IT as a Competitive Weapon

• Business Enablement
• The fundamental role of IT is to efficiently
  provide the business with required information
  that is both accurate and timely.
• Further, well managed and designed IT should
• Facilitate collaboration among distributed
  staff, across
• geographical or business units
• Enable improvements to enhance and/or automate
  business
• processes
• Proactively scan for and exploit new
  technologies in support
• of the business

50
Using IT as a Competitive Weapon

• Business Innovation to Aim for
• Sustained Competitive Advantage
• Erik Brynjolfsson of MITs Sloan School of
  Management, says that the roots of Americas
  productivity surge lie in a genuine revolution
  in how American companies are using information
  technology.28 Good companies are using IT to
  reinvent their business processes from top to
  bottom.
• To firms that reinvent, or even simply try to
  improve, their business processes, there are
  surprising benefits. The software that runs
  many business processes has become an important
  competitive weapon.
• Strategic innovation may not require any new
  products or new technologies. Operational
  innovation, in Michael Hammers words from the
  April 2004 HBR, can add to shareholder value,
  meaning competitive weaponry focused on producing
  competitive advantage. Both process innovation
  and strategic innovation will often account for
  more competitive advantages than entirely new
  products or technologies.
• Innovation and invention have to take place
  continually and systematically. No single
  innovation can convey lasting competitive
  advantage.
• 28 Special Report on Business Innovation, The
  Economist, April 24-30, 2004.

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Using IT as a Competitive WeaponConclusion

• Businesses succeed only to the extent that they
  fill customers needs better than their
  competitors. The success of a business
  enterprise does not hinge on any one leader, any
  single product, or any unique process. It is
  primarily the result of an unwavering attention
  to the execution of its core success strategy.
  Everything that the leadership directs must be
  aimed at fulfilling that strategy.
• Therefore, to claim that IT by itself is a
  weapon, is false.
• IT, when used in support of a business core
  strategies for success, can be the enabler, the
  accelerator of momentum to achieve competitive
  advantage. IT provides the critical spark that
  transforms business processes into competitive
  weapons. Innovation, invention, and re-invention
  must take place continually and systematically to
  enable competitive advantage to endure.

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Using IT as a Competitive WeaponConclusion