The Competitive Edge

The Competitive Edge

To promote competitive advantage through information, the CIO must influence the enterprise toward a higher information orientation. This takes a few steps

Building acceptance of a new information orientation is the CIO's role.

Cpmpetitive value requires information. We know this and our competitors know it too. To create sustained competitive advantage, the enterprise must value information in new ways. The sort of new ways we are talking about are broad. They cover IT practices, information management, and values and behaviours. These aspects of IT are known collectively as information orientation (IO).

The elements that make up information orientation are like the players on a team. Get all of the team playing together and it's possible to win consistently against your competitors.

To promote competitive advantage through information, the CIO must influence the enterprise toward a higher information orientation. This takes a few steps.

Competitive advantage requires more than good information. To achieve competitive advantage, an enterprise needs to achieve what some economists refer to as "asymmetry" - a capability that competitors can't match. Think about retailer Wal-Mart's data-mining program that began in the late 1980s and continues today, or global brewer Anheuser-Busch's ability to precisely align products and distribution with the beverage tastes of its customers, based on demographic analysis.

Asymmetries may result from structural advantages, such as scale, privileged relationships, extraordinary abilities in execution, or unusual insight or foresight. Information asymmetries may contribute to advantage in any or all of these.

Asymmetry, if it is to last, must be explicitly recognized and managed as a source of competitive advantage. Any data warehouse manager can tell tales about important information ignored by decision makers.

Information orientation is the gap between competitive value and competitive advantage. Based on research by management gurus Donald Marchand, William Kettinger and John Rollins, who coined the term, information orientation (IO) measures how much an enterprise is prepared, with values and beliefs, and is enabled, with information management and IT practices, to use information to create a competitive asymmetry.

Marchand and colleagues benchmarked IO metrics for hundreds of companies in many industries worldwide. No one factor correlates with superior business performance, but three factors combined correlate strongly: information technology practices, information management practices and information behaviours and values.

Marchand's research shows that information values and behaviours - how the enterprise thinks about information, and the ways information is used at personal and corporate levels - are critical to competitive advantage.

In many ways, these values are consistent with what most people think of as good business ethics. They include integrity, formality or how much the enterprise relies on formal sources of information, control over how much information about business performance is disclosed to employees, transparency, sharing information within and sometimes outside the enterprise, and proactiveness or how employees seek and use new information.

If good information values and behaviours are critical to information orientation, does this mean that companies acting unethically will find it difficult to use information as a competitive weapon? Intuitively, yes. If the information a company needs is systematically corrupted by management or hidden from view, how can it be used to make effective business decisions?

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