SPEED: The Great IT Offering

Information Technology (IT) provides value in many ways, including better, faster, cheaper, more and continuity. In this article, I'd like to give some thoughts on the speed (faster) benefits provided by IT and how we can communicate this benefit to stakeholders, management and others we need to influence.

I find it interesting that discussions take place based on the question: Does IT provide a competitive advantage or is it a commodity? It is my conviction that the only reason these discussions can take place is that we (the IT professionals) have failed to communicate the value we provide. If we really understood the importance of communicating our value benefits, and placed the appropriate emphasis on it in our technical schools, we would not be having these conversations.

Consider this: If you are continually innovating (improving the speed of communications, reducing transaction times, providing better information, etc.), you must have a competitive advantage for some window of time. That window of time, which I refer to as the CAW (competitive advantage window), is the time between when you implement an innovation and when your competitor implements the same or similar innovation. This is the reality of competitive advantage in any industry – not just IT.

One key area where we can provide true competitive advantage is in the area of speed. Let me illustrate this value and how it can provide a competitive advantage.

Imagine there are two widget stores in your city. We'll call them Widget World and Widget-Mart. Widget World believes that IT is a commodity and, therefore, does not seek competitive advantage in this area. In contrast, Widget-Mart has a CIO with a strong belief in the competitive advantage of speed provided by IT. This CIO, Sarah, communicates the speed advantages provided by their current order processing system and, through extensive analysis, discovers optimization points which will allow them to reduce each order processing cycle by twenty seconds.

At a management meeting, Sarah presents here improvements as follows:

As you know, we currently have a wait time of four minutes in our checkout lines, which is the same as our competitor Widget World. On average, there are four people waiting in any given line. The reason for the four minute wait, is the simple fact that it takes about sixty seconds to process the sales for the average customer.

Through our analysis, we've discovered a way to reduce the transaction time by twenty seconds. This means a reduction in wait time from four minutes to only two minutes and forty seconds. We predict that line size will drop to three, if we choose to run the same number of registers. We can also run thirty percent fewer registers and still maintain a wait line four deep. This would allow funds to be diverted to other areas.

Here's how we can accomplish this…

Do you see how Sarah is communicating the value of speed? Do you see how this provides a competitive advantage? When I present this type of scenario to my training classes, without fail someone suggests that it is only a short-lived competitive advantage. I would agree with that speedily and then add another important thought: What long-lived competitive advantages are being created today?

Due, in part, to the rapid speed of communications (another example of a past IT advantage) most innovations are adopted quickly by the competitor. The key is to keep on being first in as many areas as possible.

Think of it like this. If you had been visiting both of the widget stores, in our example, and then noticed the shorter lines at Widget-Mart, wouldn't you lean toward that store more often than not? Wouldn't you internally decide to make your purchases at Widget-Mart (assuming all else equal) instead of Widget World, if at all possible? Sure you would. We've seen this play out in the retail marketplace again and again.

In the end, I think the key question is not whether IT provides a competitive advantage, but, rather, how long does a competitive advantage remain so? We are in an age of continual innovation and change and we must learn to cope with that.

I would suggest, then, the importance of communication of value and discovery of the same. This has not changed and is not likely to change in the near future.

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