I think that as developers, we too often ignore business objectives and the driving forces behind the projects on which we work. Because I'd like to know more about how to think and analyze in those terms, I decided to take a course about Management Information Systems this semester in grad school. One of the papers we read particularly stuck with me, so I thought I'd share the part that did: When we undertake a risky project (aren't they all?), we should consider what competitive advantage it will give it, and if that advantage is sustainable.
To measure sustainability, Blake Ives (from University of Houston) and Gabriel Piccoli (from Cornell) identify four barriers to erosion of the advantage (this is within a framework they present in the paper, which is worth reading). The barriers are driven by "response-lag drivers," which the authors define as "characteristics of the firm, its competitors, the technology, and the value system in which the firm is embedded that contribute to raise and strengthen barriers to erosion." In any case, on to the four things we should consider:
IT Resources Barrier: This barrier is given by IT assets and capabilities. How flexible is your IT infrastructure? Better than your competitors? How good are your technical people's skills, including management? How good is the relationship between business users and IS developers?
Complementary Resources Barrier: They use the example of Harrah's using its "national network of casinos to capture drive-in traffic and foster
cross-selling" between locations as a perfect example. They also note that these complementary resources need not be considered assets, and could even be liabilities, which, when teamed with the right project could turn into assets.
IT project barrier: This includes the characteristics of the new technology - how visible, complex, and unique it is. Further, it adds the implementation' complexity and process change. Can your competitors readily see your new technology? How complex is it to build? Is it just off-the-shelf software that a competitor could buy as well, or is it proprietary? How complex is it to implement (is it as simple as Word, or is it a complete ERP system), and how much will your daily business processes need to evolve in the implementation of change?
Preemption Barrier: Whereas for the most part we can control the first three barriers within our own organization, or more importantly, a competitor theirs, this is less easy to control, but should be easy enough to predict (I don't think they say that, but based on the description, I think it would be). The idea here "focuses on the question of whether, even after successful imitation has occurred, the leader’s position of competitive advantage can be threatened." What are the switching costs for users of your application? Are they high enough to prevent them from leaving if a competitor was able to imitate your system? It also includes the structure of the value system: do they need another provider of this service (relationship exclusivity)? The authors use the example that you typically have only one mutual fund investment provider. Finally, is the link you are serving with the project in the value chain concentrated enough that you can capture most of the market and "lock-out" your competitors?
I couldn't find the paper online (for free), but if you are interested, you can find it at MIS Quarterly
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Posted by Sammy Larbi
on May 05, 2015 at 08:54 AM UTC - 6 hrs