Information Technology Increases Competitive Advantage - Top 3 Reasons

What is Competitive Advantage Anyway?

Very frequently you find small companies taking care of business the way they have always done it without stopping and see if there is a better, more efficient way to do things now. “Why fix it if it ain’t broke” they say. However, in a competitive environment, that is not the question. We should ask ourselves instead, “why is the guy across the street selling more than me if my thing ain’t broke?” well, that guy did not wait for “his thing” to break down. He just made it better before anybody else did. He found a way to increase his Competitive Advantage which means that he could do something better/faster/cheaper than his competitors. In this reality, is your business the guy waiting for his thing to break or the guy across the street outselling everyone?

Information Technology Increases Competitive Advantage

When competition is fierce (and when is it not?), Information Technology can help sway the balance in your favor and this article outlines the top 3 reasons how a small business can increase its Competitive Advantage through I.T.

Reason # 1 – Information Technology Can Help Increase Revenues

Competitive Advantage - Web Presence. Does your small business have a website? Is your website easily found in searches? Are you converting enough visitors into customers? If you answered “yes” to these questions, you may already be the guy across the street, but if not, it is time to hire (in-house or outsource) a good web developer and come up with a solid action plan.

Competitive Advantage - E-Commerce. Does your company sell products? Do you have an electronic shopping cart? Do you accept different online payment methods? If businesses within your industry are mostly brick-and-mortar only, becoming a click-and-mortar through Information Technology can help differentiate your company and increase its competitive advantage.

Customer Relationship Management Software – CRM Competitive Advantage. Do you have a sales staff? Do they follow standard sales pipeline management practices? Is your sales staff following up in a timely manner with all customer requests? Are you setting up realistic sales goals and tracking down the performance of your sales team? If you answered “yes” everywhere, you are definitely that guy across the street. If not, your company may be missing on opportunities that you don’t even know about and you could really benefit from having a CRM solution in place. Information Technology once again can help strengthen your Competitive Advantage by increasing the sales close rate.

Reason # 2 – Information Technology Can Help Increase Productivity and Reduce Operating Cost.

Competitive Advantage - Computer Networking. Do you have more than one employee? Are your computers in a network? Are your employees able to share files, applications, printers, and/or internet connection through the network? In this technology-driven era, these questions may seem silly to many folks. But in reality, there are many small businesses out there that have multiple workstations but yet, they are not networked, linked or shared in any way, shape or form. Imagine how long it takes for someone who wants to share a Word Document with another user. They have to burn a CD, put in on a flash drive, or at best, email each other. A simple network will save everyone time and that my friends, directly contributes to any business’ bottom-line and strengthens their competitive advantage.

Automation Software - Competitive Advantage. Picture this true story. Until recently, a client did all of their day-to-day transactions in MS Excel. A customer would come in and the clerk would fill in transaction details in MS Excel and manually print a receipt. Needless to say, this was very prone to error. They had folders by years and one spreadsheet for each month. Within each spreadsheet, they had 30 or 31 worksheets, one for each day of the month. Every day the clerk would email the latest spreadsheet to someone else who had to copy and paste some of the transactions (one by one) into a website to file a state report (it would take this person an hour or two every day to file this report). After seeing their process, we set them up with a simple Open Source Point-of-Sale System that stores default item pricing and issues receipts automatically. The system has pretty good built-in sales reports and we wrote up a PHP script to run a custom-made report for the state. Today, it takes minutes to do what it would normally take hours before and with a database in place now, we are pulling reports to see who is a repeat customer and who brought the biggest profit margin, etc. This allows management to actively call on customers which translates into an increase of business. None of this competitive advantage would have been possible without having a simple I.T. Automation tool in place.

Enterprise Resource Planning Software - Competitive Advantage. Does your company have multiple departments? Do your work flows overlap among different functional areas? Do you have a requisition-procurement process in place to support different departments? Does your accounting function support project percent-of-completion? Imagine the chaos that would result if an operation like this failed to be efficiently coordinated among players. Through a good ERP Solution, Information Technology can really make a business operation stand out and rise above its competitors.

Reason # 3 – Information Technology Can Help Secure the Privacy of Your Customers and Employees

Customer Loyalty / Employee Retention. You have a really good product and a website that is easily found in searches. Your shopping cart is top-notch and customer service is superb. The sales folks are highly motivated and close big deals. But your network security is not adequate and someone hacks into your server, steals your customers’ credit cards information and with it goes your reputation and your customers. Here, Information Technology strengthens your competitive advantage quietly behinds the scenes and although its bottom-line contribution may not be immediately apparent, imagine the loss of revenue and the cost of cleaning up a mess like this should a problem like this happen to you.

The list is not comprehensive. Any single item on this article can be expanded upon and new things can be added. But still, it gives a pretty good overall idea of how I.T. can strengthen a business competitive advantage. A big misconception however, is that small businesses may believe that they do not have enough time and money to implement a solid Information Technology infrastructure. With Open Source software available and the right IT Service Partner lined up, any company can see some of these benefits but that is the theme for my Next Hub. If you are in Houston, and would like to discuss how our IT Managed Services can help increase your company's competitive advantage, be sure to give us a call. Until next time, thanks for reading !

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BrianS 6 years ago from Castelnaudary, France

You are definitely getting the hang of creating hubs. Some pretty compelling reasons for taking on board IT.

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