Is Information Technology your Strategic Advantage?
By Ravi Kathuria
Does your company’s strategy explicitly incorporate information technology (IT) to create a strategic advantage? While utilizing IT to manage back-office and operational activities is extremely important and necessary, your company must ask itself — to what extent are we strategically leveraging IT.
Business and IT Gap
Even today, you will find senior executives who complain they do not understand IT. They see IT as a cost center, an expense that must be constrained, as opposed to an investment. They struggle because understanding information technology is quite a challenge. It is a bewildering, fast changing field. Further, communicating with IT professionals is not always easy, they can seem to be from a different planet.
The IT teams, on the other hand, resent being viewed as tactical and as a cost center. They feel unappreciated for the complex problems they solve and the value they create. The IT teams desire a seat at the strategic table, but often fail to understand the business drivers, and appreciate the underlying dynamics.
The gap between the business and IT teams makes it quite difficult for companies to create competitive advantage through IT.
"Make sure you clearly detail how IT systems advance your strategy."
Resolving the Gap
Focus on what is important — the emphasis should be first on the information, and second on the technology. Ask, what business problem are we solving, and why are we solving it. What is the financial (and other) benefits of solving the problem? Focus first on the problem domain and then on the solution domain. The particular choice of technology resides in the solution domain. Do not let the solution dictate the problem, focus on what is important.
Set the right context — sometimes, business executives try to use IT to solve a problem that must fundamentally be solved on the business end. The IT team must be discerning. For example, if sales executives cannot discipline the sales team to follow a sales process, a sales force automation system will not automatically solve the problem. The sales system will remain unused, or it will be used in such a manner where the information in it does not create much value. The goal is not the creation of a sale force automation system, the goal is achieving a highly productive sales team. A sound sales strategy, coupled with a disciplined sales process automated through an IT system will deliver the goal. Set the right context.
Using IT to Create Strategic and Competitive Advantage
As the CEO, you must make sure your strategy clearly details how IT systems contribute in the formation, evaluation, execution, advancement and evolution of your strategy. If your strategy fails to leverage IT beyond the back-office and operational activities then your company will underperform compared to its potential, and lose out to the competition.
As the CEO, one of your most important duties is to create a knowledge organization. IT is the ultimate vehicle to help you increase the enterprise knowledge and business intelligence in your company. Ask your organization, have we engineered the right IT systems to capture greater knowledge about our markets, customers, products, marketing and sales processes, operational processes, talent and skills, critical success factors, and the performance of our strategy. A key business performance metric you should monitor is the annual increase in the company’s organized knowledge. Another metric is the efficacy of your business intelligence — what was your business intelligence’s impact on increasing revenues and profits.
If your company does not leverage IT to understand how well it is executing its strategy, your strategy will not improve from year to year. Leverage IT strategically to ensure your organization does not stagnate.
A recognized thought leader, Kathuria has been quoted in various publications including The Wall Street Journal, Barron's, WorldNews, and featured on the BusinessMakers show, CBS Radio, Nightly Business Report, TEDx, and is a monthly columnist for the SmartBusiness Magazine.
Kathuria is the author of the highly acclaimed book, How Cohesive is your company?: A leadership parable. It is a realistic and intense story of how a CEO struggles to transform the business and, in the process, struggles with his personal transformation.
Kathuria is the founder and president of Cohegic Corporation, a management consulting, executive coaching and sales coaching firm. Halliburton, Hewlett-Packard, St. Lukes Episcopal Health System, AT&T, and Imperial Sugar Company executives have co-published seminal business articles with Kathuria in the Houston Business Journal on sales effectiveness, performance, corporate culture, and change management.
Invited to speak at large conferences and corporate meetings, Kathuria is a thought provoking and vivacious speaker. He has spoken at the 5th Annual Veterans Entrepreneurship Conference, Rice University, Business Forum on Emerging Markets, University of Houston's Wolff Center For Entrepreneurship, University of Texas' Fleming Center for Healthcare Management, Institute of Internal Auditors, Dover Club, Galleria Chamber of Commerce, American Business Women's Association, French American Chamber of Commerce, Business Resources Group, Financial Executives Networking Group, Silver Fox Advisors, Houston Technology Center and the 2011 SPE Americas E&P Health, Safety, Security, and Environmental Conference.