One of the more common business phrases of today is “competitive advantage.” According to Wikipedia, “Competitive advantage occurs when an organization acquires or develops an attribute or combination of attributes that allows it to outperform its competitors. These attributes can include access to natural resources, access to highly trained and skilled personnel, technologies such as robotics and information technology either to be included as a part of the product, or to assist making it.”
I contend that “another” key attribute that contributes to compeitive advantage is the processes your organization follows to conduct business. From processing accounts payable to hiring new employees to generating sales quotes, how your organization does what it does is either contributing to or detracting from your competitive standing in your market.
As indicated in the Wikipedia definition, technology often is seen as the panacea for creating competitive advantage, and many organizations mistakenly pursue the course of automating their current processes to achieve that end. What these organizations fail to realize is that automating existing processes will, in the best of cases, yield only incremental improvement. You may be able to issue payments faster, or have an electronic copy of your hiring documentation, or automatically obtain the latest product pricing, but have you really created competitive advantage?
In order to create significant competitive advantage that lasts longer than the next quarter, an organization needs to re-examine how it does what it does, and develop a new way of creating value for its customers, shareholders and employees. For example, creating a streamlined payables process that leverages cloud technology to create, store and organize sales quotes, purchase orders, invoices, supporting documentation, etc. that is integrated with a payment processing capability actually eliminates the needs for manual checks. In addition to eliminating the “dead time” waiting for these various documents to exchang e hands in the current process, it also increases the velocity of cash and makes documents available to all parties in a centralized location. Attention to the process has created a competitive result ─ greater cash velocity and increased efficiency for all parties involved in a transaction.
The point of this example is to illustrate that competitive advantage begins with an idea of how to do something better than it is being done today. Successful organizations are constantly in search of the next “better way” to do what they do, and recognize that satisfaction with simply automating the status quo is not a sustainable strategy.