Staying Ahead With Strategy: Simplification through IT

Gift a book on strategy by Philip Kotler to your CEO and keep inquiring how many pages he has read. I am sure his expressions will say it all. This is how strategy is perceived: complex and cagey. Well, the basic need for a competitive strategy is to enhance the stakeholder's value in the business and boost resource productivity. Competitive strategies are very generic in nature, where competence and capability are its inherent dimensions. The roles of all those who are involved in strategy-making, right from the one who drives or engineers or enables it are equally vital. And you cannot forget their contribution. The co-creators of wealth have to be rewarded adequately for their involvement. There is no escape from giving them their well-deserved share of incentive.

You just cannot please them with monthly compensation but have to be more generous in appreciating their value addition. Creativity and innovation again remain influential factors for any competitive strategy. Sometimes, things have to be seen in a new light. You have to continuously review your own perception. For instance, doing business smartly need not necessarily mean doing dirty work. We have to do away with the negative connotations attached to doing business 'smartly'. An ideal case in point would be that of low budget airlines. Maintaining a commercial staff is expensive but their need is inevitable. They have smartly outsourced their entire commercial staff. This is indeed an astute move to cut down the expense in the business interest and at the same time adhering to ethical business practices.

Plan for Results

While maintaining ethical practices, it is also critical for a business to the cost of the value chain and the price of the product. Also, without being specific to any vertical, cost leadership has to be a key component for devising a strategy with an aim to achieve total productivity. The great Indian Postal Service (IPS) is a classic example of efficient process and differentiation of the same. Any parcel or mail you send via the IPS will surely reach its destination on, say, the seventh day. But try and trace it in transition and you will be clueless. Now a private courier service, on the other hand, will enable you to track your mail but you are still unsure of when it will reach its destination - despite the use of the best technology.

In fact, it will give you some fancy ID to play on its system to track your parcel but will not commit on when it will reach you. It's essential to deliver outputs and not just refine the process. But again, it is obviously indispensable to be focused on the framework of the strategy. Strategic positioning of the product cannot be overlooked. A popular chain of coffee shops, Café Coffee Day, clearly states - 'a lot can happen over coffee.' It is consolidating its image by a simple, yet powerful tag line. Your strategy should be able to assure longterm growth. There has to be perpetuity to the strategy design. When you talk about strategies that can be replicated, I have a case in point: the famous cookie brand of Mrs. Field Cookies.  These cookies are available everywhere in the world but taste the same no matter where you eat them. What I'm trying to demonstrate is that business models have to be necessarily replicable - and not just scalable.

Made to Order

Made to Order

Well, the latest trick in town is mass customization. Asian Paints was quick to understand the psyche of the customer and accordingly provided them with a customized color palette, which is a classic example of adapting to mass customization. It became an instant hit and definitely gave some sleepless nights to its competitors. Envisaging multiple factors that would govern the competitive edge of business, some existing standards anticipate addition of few new pointers. Price-performance relationship has always been critical to any business. And it will continue to be so. Mass customization, as said earlier, will continue to make a difference and give an edge to your organization in your domain for sure. With globalization now settling down, it is wise to leverage global resources to minimize the cost.

In the near future, it would be the federation of organizations that would impact the overall business culture. We all know that products have stopped selling, so it is time to sell services. A very tongue-in-cheek remark, but I am sure you would agree. Experimental solutions would command significant weight in the overall business strategy. This again, emphasizes on being creative and innovative. When mergers and acquisitions are making headlines every other day, consolidation of the markets will be soon the order of the day. The current number of mergers and acquisitions are only the tip of the iceberg. But with all these factors, technology would continue to dominate and processes would rule the roost.

Knowing When to Back a Technology

Adoption of the latest technology trend is the key. One has to keep up with the pace of technology use in the external environment. You simply cannot work with bar codes when the rest of the world has moved to RFIDs. IT will have to be leveraged to the fullest, given the socio-political, economic and technological environment. CIOs will have to ensure that the managerial support available will help develop certain maturity level in the business process. In course of time, new systems will be replaced by old and that would obviously involve hardware and software translating into a lot of investment and training. But when the business challenges are critical, relative emphasis on the IT department is bound to change. IT applications need to provide tangible and non-tangible benefits such as cost benefit analysis, trust, credibility, etcetera. The applications should collectively strengthen the competitive position in business parameters of cost containment, aggressive sales, integration of information and so on. But at the end of the day, the emphasis has to be on making things simpler. For a CIO, it is challenging to stay away from the complexity of the technology. Complex technology has to be leveraged to simplify business processes. And that is the mantra of strategy for a CIO.