Tom Davenport on E-Strategy: The Next Killer App?

By Tom Davenport

Tue, May 01, 2001CIO Strategizing about the role of IT in business has been a roller coaster during the past couple of decades. The ride really started in the early 1980s, when academics and consultants discovered a few managers who had--consciously or not--built their competitive strategies around key IT applications. Maybe you remember: American Airlines and United Airlines had their reservation systems. American Hospital Supply had its online ordering system. Frito-Lay had its handheld devices for the sales force. The realm of strategy as killer app lasted until 1990 when reengineering reared its head. For the next five years IT strategy would consist of redesigning business processes around the capabilities of technology. In the mid to late ’90s, new strategic thrusts came quickly: ERP, knowledge management, CRM. Late in the decade, IT strategy effectively became e-commerce strategy, or e-strategy. The only thing that mattered was how the Internet affected your business.

Today we realize that, just like every previous strategic emphasis, e-commerce can’t do all the heavy lifting. The most aggressive adopters of the Internet, as any burned stockbroker will admit, haven’t necessarily been successful in gaining profits or market share. Sure e-commerce is important, just like all of the other IT-enabled strategic opportunities that preceded it. Perhaps it’s even the most important of them all. But by itself, it’s not enough.

So what’s the new nostrum for using IT to slay your competitors? Is it still even reasonable to think about IT as such a weapon? Since the magic bullet of choice seems to change every few years, maybe we’ve simply been kidding ourselves about the strategic role of technology.

There is evidence of technology’s potent effects, and they lie in the continuing success of the companies that use them well. Think about it. Do you know of any companies that invested long term in IT that have gone out of business? In airlines, United and American have long been the IT innovators, and they’re the largest companies in their industry. In parcel delivery, FedEx has been an IT pioneer from the early days, and the resulting prosperity has been dramatic. UPS was originally quite weak in IT but then made a major strategic shift and invested heavily in technology for more than a decade. It’s no coincidence that UPS has become the primary delivery channel for Internet-procured parcels. In banking, State Street has pursued a technology-intensive strategy in its global custody business since the late 1960s when Bill Edgerly came to the company from IBM; it’s been more consistently profitable than any other U.S. bank. Then there’s Wal-Mart. And H.E. Butt Grocery and Wegmans Food Markets in the retail grocery industry. USAA and The Progressive Corp. in the insurance industry. Dow Chemical in chemicals. BP in the oil business. All of these companies have built their IT capabilities for the long haul, and their strategies have been much the better for it.


Loading...
Applications MarketSpace
Exchange 2007 Risks and Mitigation Strategies
This whitepaper will review the strengths of Exchange 2007 and areas where CIOs should consider third party solutions. Learn more »
Solving On-premise Email Challenges
This white paper presents ten on-premise challenges and their on-demand services solutions. Learn more »
An Open Framework for Business Intelligence
Architecting Business Intelligence Applications for Change Learn more »
Adobe for Business Process Automation
Companies must be able to react to customer demands, competitive threats, and compliance requirements. Learn more »
Increase Customer Satisfaction and Lower TCO
With Adobe® LiveCycle® Enterprise Suite (ES2) software, organizations can easily deploy intuitive user experiences. Learn more »
Practical Approaches for Securing Web Applications
Enterprises understand the importance of securing web applications to protect critical corporate and customer data. What many don't understand, is how to implement a robust process for integrating security and risk management throughout the web application software development lifecycle. Learn more »
An Executive's Guide to Web Application Security
Since so many Web sites contain vulnerabilities, hackers can leverage a relatively simple exploit to gain access to a wealth of sensitive information, such as credit card data, social security numbers and health records. It's more important than ever to examine your Web application security, assess your vulnerability and take action to protect your business. Learn more »
 
SPONSORED LINKS
 

CRM Built for IT: The Executive Guide to Selecting CRM that Meets IT Needs

ROI of Application Delivery Controllers

White Paper: 4 Customer Service Myths

White Paper: Improve Agility with Operational Responsiveness

Removing the Barriers to IT Governance: How On-Demand Software Changes the Game

Cloud Computing--Latest Buzzword or a Glimpse of the Future?

A Balanced Approach to an Application Development Platform

Adobe® LiveCycle®solutions for intuitive user experience

10 Ways Excel Drives More Value from Your SAP Investment

What's New in SOA Suite 11g?

Unleash the Power of Java with Oracle JRockit Real Time

SOA Best Practices and Design Patterns

Application Grid: Ideal Platform for IT Consolidation

Ready to virtualize tier one applications? Check your virtualization maturity.

Learn how to provide complete Business Service Management.

Increase ROI of Your Application Portfolio

Return on Information: Google Enterprise Search pays you back. Get the facts.

VMware. The source for Business Infrastructure Virtualization.

ShoreTel tells businesses to untangle from competitors' complexity and turn to its brilliantly simple UC solution

See how AT&T can help protect your network.

Streamline IT Costs. Boost Performance with WAN Optimization.

Build your 1st app FREE with Force.com

TDWI checklist helps define data readiness for analytics. Download report.

eZine: A Roadmap to Reducing IT Complexity

Reduce risk, gain agility. See how Progress can help your business.

What's Next for Enterprise Resource Planning?

Gartner Magic Quadrant, Application Delivery Controllers 2009

White Paper: Managed Security for a Not-So-Secure World

SharePoint - Unchecked growth of content is unsustainable.

Focus Under Pressure: Why IT Governance Becomes Mission-Critical in a Down Economy

Should Your Email Live In The Cloud? A Comparative Cost Analysis

Adobe® LiveCycle® solutions for business process automation

Architecting Business Intelligence Applications for Change: The Open Solution

Increase UPS efficiency without sacrificing protection.

Unlocking the Mainframe: Modernizing Legacy System to SOA

State of the Data Integration Market

Enhance Customer Loyalty through Higher Responsiveness

Achieving Business Agility with Application Grid

Seven Ways ITIL Can Help You in an Economic Downturn

Four steps to populate your CMDB.

"Enterprise-Proven" is the Prerequisite for Enterprise SaaS Portal Solutions

AT&T Synaptic Storage as a Service. Expand on demand

Trend Micro ranked #1 against real-world malware. Read more.

Webinar: Jump-start your in-house e-discovery with Ringtail QuickCull from FTI Technology

Top Five CIO Challenges

Read the RSA report: Security for Business Innovation

64-page prescriptive guide to security, compliance, and IT operations.

A Clear View Toward Virtualization

Virtualization Technology as a Business Solution

The rules of infrastructure management just changed.

 
 
RESOURCE CENTER