Blog post

IT enabled competitive leaders are sometimes 15 years ahead of laggards

By Mark Raskino | March 14, 2013 | 0 Comments

Over the last few weeks, I have been reminded just how far ahead some businesses are in the great race of the information age. We are now at that stage of the marathon where the field is stretching out and the gap between leaders and laggards is getting bigger. Here are the ‘datapoints’ that set me thinking:

* Large UK supermarket chain Morrisons has announced it will provide an online grocery shopping service from 2014.  I think I still have a very faded receipt from my first online grocery shopping experience with Tesco – dated 1996.

* I have been reminded via several client interactions that global standardised ERP operations for a very large corporation seem to be programmes that take 6 to 8 years to implement, and in some cases corporations have needed 2 goes to get it right. Perhaps that’s why our latest CEO survey data shows again that Nestle is admired by other business leaders for its strategic use of IT. Yet some large companies are only embarking on that journey today – having put it off for many years.

* In the context of data driven business thinking and a truly advanced capability in business intelligence, some companies like P&G with its real-time cockpits, or those who understand what a chief data officer is for – are at least a decade ahead. Their advanced are as much in management culture and discipline as they are in information systems and data sources.

One question that immediately arises, as in any race, is whether the laggards or at least the chasing pack can catch up. It is certainly a very hard task.  It’s difficult to buy and install a whole competency. You might buy another firm in your industry to acquire the skills and knowledge along with the systems – but that option isn’t always available.  Morrisons took an equity stake in the US company Fresh Direct 2 years ago. The business press has speculated that Morissons might buy Occado – and the firm itself has openly discussed partnering with them. Whatever happens, playing catchup in a major technology enabled strategic capability like online grocery at scale, is an endeavour that takes many years.

I think it is likely in many cases, that a gap whch took 10 or 15 years to open up, might be closed in half that time. After all – the knowledge is codified and transferable via consultants, packaged software and talent acquistion if not by M&A.  But to fund the work required over 5 to 7 years, to catch up with a competitor on a strategic capability that matters – you will need good strong cash flows from other parts of your current busness capability.

In 2013, the laggards in the technology enabled strategic capability race are busy thumbing through rolodexes looking for head hunters, who can find them a “chief digital officer” or similar leader to accelerate their catchup.  They must also hope that the non-technology business strategy ideas that were apparently more attractive a decade ago, will continue to yield the investment they need to fuel the gap closure project ahead.


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