| July 23, 2010
Caveat vendor
PROVIDING continuous improvements to existing business processes -- as opposed to being the inspiration for new ones -- is currently the primary purpose of IT. Vendors that survive and succeed will be those that establish go-to-market strategies to match the new buying environment.
There is a shift in the balance of power between business and the consumer and between the vendor and the customer, which is leading to challenges for all organisations regardless of size and business sector. Established businesses are increasingly finding themselves been squeezed by entrepreneurial newcomers who -- unrestrained by legacy systems and unblemished by previous corporate misdemeanours -- are now challenging conventional business practices and offering new business models.
Now that companies can source capital, goods, information, and technology around the world with a click of a mouse, much of the conventional wisdom about how companies and nations compete needs to be overhauled. In theory, more open global markets and faster transportation and communication could diminish the role of location in competition. Competition in today's economy is very dynamic in certain sectors. Executives must extend their thinking beyond what goes on in their own organisations. Extensive vertical integration may once have been appropriate, but these days companies must have close linkages with buyers, suppliers, and other institutions.
What is the difference between those organisations that succeed and those that fail? Obviously not all organisations are created equal -- some have better leadership, some more dedicated and creative employees, and some more resources to help them accomplish their goals. In spite of these differences, organisations can still increase the probability of success when trying to realise the benefits of these latest business trends by engaging vendors who are innovating around process, performance and end?user experience. This implies deep knowledge of the relevant domain and/or customer.
The tech giants are snapping up competitors at relatively low prices to bulk-up and buy into new lines of business. Vendors that are in tune with the customers' new needs are finding it's far better than just being one of the many vendors trying to sell products: several companies are now finding themselves increasingly out of step with the demands of business.
Vendors that stand out in the trench warfare are characterised by management that is market-aware and committed to market dominance by virtue of technological superiority, well trained personnel, and outstanding marketing acumen. But we must not forget that the industry graveyard is littered with memories of vendors which took for granted the belief that their market dominance would continue in perpetuity.
Over the decades IT has often had to fight to be seen as an integral and strategic part of an organisation. In the best of times IT has had a seat at the strategic table. In the worst it was seen as just another cost centre. There's a lot happening out there. not only have we seen the reappearance of the merger and acquisition activity, but we've seen a sea change in the buyers' approaches to technology.
-- Len Rust RustOz@bigpond.com
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