Last Word - All Competitive Advantages Are Not Created Equally

Achieving “competitive advantage” is one of many reasons why companies pursue changes to their business capabilities and operations. Changes can be short-term and opportunistic, long-term and evolutionary, or foundational to the forward-looking goals of the business. Regardless or which, examining change through the lens of "competitive advantage" yields useful guidance to those charged with implementing change. Achieving competitive advantage is an enterprise concern with broad implications that require enterprise level analysis and coordination. An Enterprise Architecture (EA) programis uniquely positioned to coordinate strategy and planning across the full spectrum of “competitive advantage” business opportunities.

A discussion with business leaders about achieving competitive advantage can be enlightening. Every enterprise architect should have one. Approaches fall along a spectrum with the ends defined by companies that view competitive advantage as individual transactional initiatives at one end and those that see it as a strategic endeavor at the other. In practice, most companies are hybrids, exhibiting some of both behaviors. A conversation provides perspective of where along that spectrum your leaders want to operate.

Organizations that treat competitive advantage from a transactional perspective are often opportunistic and use the art of maneuver to add and change business capabilities. Competitive differentiation of this type requires faster-than-average business process change, placing enormous demand on the ability to access key information assets and also on infrastructure. Agility and providing access to the right information to the right people at the right time are key architectural requirements.

Organizations that treat competitive advantage as a strategic endeavor approach it differently. Companies at that end of the spectrum tend to focus on the creation of sustaining capabilities. They want a strong foundation and look to balanced scorecards, business intelligence, and other analytic techniques to inform their decision-making and operational processes. Competitive advantage is treated as a way of life, not as a quick win. Value delivery, resource optimization, efficiency and effectiveness define the characteristics of their architecture.

So, what should the enterprise architect do? First, have that conversation with business leaders to understand where along the spectrum they want to operate, identify short-term and long-term competitive drivers, and analyze their collective implications for the future-state enterprise architecture. Use these to construct a flexible, adaptive EA that defines a long-term foundation for the business and that also provides immediate guidance for today’s short-term priorities. Finally, bias the creation of EA content according to the enterprise’s current position on the “transactional to sustaining” competitive advantage spectrum. Revisit that position frequently and rebalance accordingly. By doing so, the enterprise architecture program fulfills its mission as a change agent, preparing the organization for the full spectrum of business change the market demands.

by George S. Paras