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May 1, 2007
Competitive Advantage
When I was an MBA student two years ago, someone shared his conversation with Warren Buffet, "so ... after 40 something plus years experience, what do you think is the most important corporate asset?" The legend cited two words: Competitive Advantage.
True to that and this applies to all BI firms. In this overly competitive and fast changing world, competitive advantage is the one that will make companies grow and sustain.
I then thought of something, 'so what competitive advantage should a BI firm develop?' There can be three possibilities: 1) low cost 2) technical prowess 3) excellence in service.
In my opinion, low cost focuses on market share and it can be easily copied by others. David Packard once said, "I hope that is straightened out. Anyone can build market share; if you set your price low enough you can have the whole damn market. But I will tell you it won't get you anywhere around here." In addition, low cost means trading off with excellence in service, and as you all know BI firms can never sacrifice on service. Giving up service in this market is like giving up beef in hamgurger market.
Second, technical prowess can also be easily copied and hard to sustain in that way. In the old days, no one knew the secret of Coke but now everyone knows the Coke formula. Also I find it is hard to differentiate with technical prowess in BI field (though I might be naive about this). Every BI product has basic features such as scorecarding, dashboard, OLAP, reporting, etc. and so far among BI products I have experienced with, I find it not too difficult to copy someone else's BI technology.
Third is the excellence in service and it is the money in my humble opinion. A BI firm can truly differentiate itself by excellence in service and this can be the most sustaining competitive advantage among the three possibilities. One can copy my OLAP feature within a month, but one cannot copy my many years of trusted service within a month. Service means being close to the customers, listening to their needs, and delivering distinguished services day-in & day-out. Service, an intangible factor, can be the most difficult but rewarding competitive advantage to develop that all BI firms should embrace as their core competitive advantage.
"The real barriers to entry are the 75-year investment in getting hundreds of thousands to live service, quality, and customer problem solving at IBM, or the 150-year investment in quality at P&G. These are the truly insuperable "barriers to entry,", said Thomas J. Peters.
One with excellent service with good technial prowess will consistently outperform one with good service with excellent technical prowess.
Excellence in service is the competitive advantage that will make you last, and I am sure Warrent Buffet will agree on this.
Posted by William Cho at May 1, 2007 7:45 AM
