One of my friends recently sent me an article from CIO connect that stated “IT Agility Trumps IT Efficiency”. Essentially the drift of the argument was that agility was becoming a much greater driver than efficiency, citing a survey in which executives placed IT agility at the top of their wishlist. Taking this point a little further the article suggested that many people now saw SOA as the best route to achieving greater IT agility and that this was now becoming the main motivator for adoption.
I obviously found this interesting but unsurprising – I’ve always believed that SOA was the quickest route to increasing agility and would only extend this to cover the use of service-orientation to organise the business around the delivery of services and not just the IT.
More broadly, however, I had some comments in relation to sources of sustainable differentiation and where it comes from; in this context I had some specific comments around efficiency and agility – the two options from the article.
Now the big problem with efficiency is that it often becomes an end in itself. Anything you can make more efficient is codifiable – whether through the use of SOA or not – and therefore can be copied by others. Therefore efficiency is unlikely to be a long term differentiator. Worse than that people who spend all of their time trying to be efficient gradually turn inwards and lose sight of why they were doing things in the first place (i.e. to give their customers what they want at best value).
Interestingly, using SOA to realise greater agility is also not really a long term differentiator since having access to technology that allows you to change your codified processes more rapidly is fine but such technology is available to everyone and therefore agility as an end in itself ceases to be a reliable source of differentiation. Whilst not moving to service-oriented business models in order to become adaptable will undoubtably be bad for your business, it cannot be considered a sustainable source of differentiation given that the option is there for everyone. In this context it is more important to identify those services within your business that capture differentiating IP or talent and which would benefit from agility to keep you ahead of your competitors.
In both of these instances the real advantage comes from recognising those services within the organisation that are key assets – and leveraging them mercilessly – whilst also identifying those things that are non-differentiating – and getting rid of them. There is no point trying to invest in the efficiency or adaptability of non-core services since in that context you are just competing with other people in areas that provide no long term differentiation.
The only real and true differentiation is increasingly going to be in the 20% of services that encapsulate IP or amplify talent – true agility will therefore require us to codify non-differentiating capabilities and – where possible – get rid of them to specialised providers whilst maximising the leverage of the tacit knowledge we have in the form of our most talented people or the IP that they generate. Ironically a search for control and efficiency in the new connected world will often disenfranchise the very people that we should give the greatest freedom to, stifling their judgement, talent and ability to create valuable relationships and in the process destroying a potent source of competitive advantage.
So is a search for efficiency and agility necessary? The answer of course is yes but they are now just the way we win the right to stay in the game and not a source of competitive advantage by themselves. A search for efficiency is often best realised through the leverage of partner services in place of endless tinkering with non-differentiating services of our own, whilst agility comes far more from our ability to leverage a web of partners who really care about service than from our own mediocre and uncaring supporting functions. At the end of the day it’s how we deliver our service that matters and for this you need your best people in the front lines supported by technology that enables them to amplify their talent or maximise the leverage of IP but not driven by technology through highly restrictive processes in the pursuit of efficiency or wasting their valuable attention implementing and supporting agility in the wrong places.