Most enterprises invest substantial time and energy into robust IT strategy documents that Gartner refers to as “WORN” (written once, read never).
To succeed, the CIO needs to create context to articulate the contribution of IT to the business process and capabilities, answering these three key questions:
1. What do we need to do to “win” in the marketplace?
2. What new business capabilities are required to achieve success?
3. How will IT contribute to that success?
Southwest Airlines business plan on a cocktail napkin
Michael Treacy and Fred Wiersema found three approaches to market differentiation:
Companies that have taken leadership positions in their industries in the last decade typically have done so by narrowing their business focus, not broadening it. They have focused on delivering superior customer value in line with one of three value disciplines—operational excellence, customer intimacy, or product leadership
Operational Excellence: providing customers with reliable products or services at competitive prices, driving costs out of core processes (business and IT).
Customer Intimacy: combining detailed customer knowledge with operational flexibility, segmenting and targeting markets precisely and then tailoring offerings to match exactly the demands of those niches. As a consequence, these companies engender tremendous customer loyalty.
Product Leadership: offering customers leading-edge products and services that consistently enhance the customer’s use or application of the product, thereby making rivals’ goods obsolete.
Companies that push the boundaries of one value discipline while meeting industry standards in the other two gain such a lead that competitors find it hard to catch up!