The Business of Technology, Part 1: Let's Get Down to Business
Technology and Strategic Advantage
This is the first part of a three-part series of articles that provide a managerial (non-technical) perspective on the effective use of digital technology in business. We'll take an objective look at what business means to technologyand more importantly, what technology means to business.
Any self-respecting business school today will have more than a few classes on managing technology or decision-making in the Information Age. This series of articles is not intended to be as in-depth a treatment as such a class, but will use case studies to illustrate the types of problems and decisions all of us are going to face in the next few years. In management school, I'd title this course "Pan-Technologies 101 (PT-101): Managing Digital Technologies in the 21st Century." I'd put an abstract into the online catalog that would read something like this:
Strategic advantage is as fundamental a business concept as assets and liabilities. In short, strategic advantage is anything that allows anyone to do business more successfully, more easily, or more competitively. If you've ever heard the phrase "Location! Location! Location!" you've witnessed a clear cut example of the strategic advantage created when you open a lemonade stand next to a salted peanuts factory, or present a "tabulating machine" to a census department that still uses pencil and paper.
Strategic advantage can be defined as a service, product, or solution that enables a company to position itself in the marketplace to better compete. Initially, let's assume that a strategic advantage implies that our business can do one or both of the following:
Do what we do nowonly better. If company A produces widgets and only widgets, it may simply want to find a better, cheaper way to make widgets and improve its profits.
Create entirely new products, businesses, or both. This option is concerned with branching out into other ventures. "We're already successful widget manufacturers, but now we want to make doodads! Will the technologies we used for widgets be successful for manufacturing doodads?"
We'll begin with two premises in the business of understanding and deploying digital technology. The first is that introducing, utilizing, or even creating new technologies must allow a business to "do it better" with the help of the new technology; the second is that the business will generate additional revenue with the new technology.