In the effort to produce competitive advantage there are three primary resources that IT managers have at their disposal to meet business requirements. They are People, Process, and Technology.
Companies already do everything in their power to hire the best people and deploy the best technologies. They compete in an open market for existing talent and are constrained by competitive realities in how effectively they can attract and retain employees. Few companies are able to effectively compete based solely on hiring the “best” people.
Likewise, technology is available through an open market. A company’s competitors have access to the same technologies at similar prices. Each company is also free to create their own software with the same functionality. For most companies it is difficult to differentiate based on technology.
Of the three people process and technology, Process is the one area where managers can have dramatic impact on the organization. In the rush to keep up with the rapidly moving technology curve, most IT organizations have spent very few resources on developing and managing the business processes that support delivery of technology services. As a result, organizations are over spending on people and technology and under spending on process improvements and living in a continuous reactive fire-fighting state.
Note: The Harvard Business Review printed an article “IT Doesn’t Matter”, May 2003, Vol. 81 Issue 5, p41 that makes this argument very well. In this article, the author makes the case that simply implementing technology in-and-of itself no longer provides competitive advantage to most organizations. Technology has become a necessary cost of doing business and it provides no competitive advantage.
Organizations that invest in improving their process management capabilities often find that they can deliver top quality IT services, while reducing the cost of IT operations. This is a savings that translates directly to the bottom line. The simple act of mapping the process through which value is delivered often turns up wasted activities and obvious ways in which value can be delivered with less effort or cost.
As organizations become more sophisticated in IT process management and build more effective working communications with the business, new methods of leveraging existing technologies are often discovered that give the business a real advantage. These advantages even if known by competitors are often difficult or impossible for competitors to duplicate, because they require a level of process maturity that competitors are often unwilling to invest in.
Documented processes are an example of organizational knowledge. Because many aspects of the process are unique to and dependent on the environment in which they operate, competitors cannot simply copy your processes and implement them in their organization. This difficulty in replication and the fact that the organizational learning process takes time to accomplish gives your organization a head start over its competitors that if maintained results in real long term competitive advantage.