Who would dispute the importance of gaining a competitive advantage in business? Competition is the mother’s milk of capitalism. A competitive edge — an advantage of one company over another vying to occupy the same niche — is the golden goose of profits, as long as the advantage holds sway. The question is, do CIOs really care enough about gaining a competitive advantage? Or has the tenor of the job — the torrid pace of technological change, the high degree of difficulty in deploying IT, the long tradition of IT as a caring and supporting function — persuaded CIOs that conferring and collaborating with other CIOs makes a lot more sense than not?
Gaining a competitive advantage certainly matters deeply to board members, according to recent Gartner research. Maintaining competitive advantage came out as the top concern of 52% of board members, outpacing 26 other board issues, including cost-cutting, restructuring the business and replacing the CEO. “Nothing else came close,” analyst Jorge Lopez, whose research focuses on CEO concerns, told CIOs at the 2012 Gartner CIO Leadership Forum. Another point that makes the old topic of competitive advantage fresh news for CIOs? Lopez cited growing evidence that when companies lose ground during a recession — say, drop from the No.2 to the No. 4 spot in their markets — they don’t regain their edge, at least until the next financial crisis alters the playing field.
However, when CIOs were asked in one of the Forum sessions whether they tracked how their competitors were using IT to competitive advantage, the majority of CIOs in the room said they did not. They were strongly advised not only to start doing so, but also to find out which competitors their CEOs admired for their use of technology.
The CIO’s responsibility in using IT to gain competitive advantage is a complex topic not given to pat prescriptions, I’m learning. One former IBM-er and IT professor, for example, tells me that CIOs need not be as concerned with what their competitors in the field are doing with IT, as they should be with what the exemplars in the IT industry are doing and “how that might be applied to their organizations.” For this reason, having a strong network of CIO peers is absolutely vital to making IT a competitive advantage in their businesses (although this is a bit of a paradox). Moreover, gaining a competitive advantage derived from IT nowadays is less about –maybe never about — deploying technology in the company, he said. All that stuff can be copied. Maybe the richer playing field is competing for customers outside the company. His view is that CIOs should focus on working with external customers and clients to find ways in which IT can make the difference for them. Your thoughts? Let me know.