Competitive Advantage and Technology

¶ … Services and Capabilities

Implementing Service Expansion

Evaluation of the Current Situation

Formulation of the Desired Future State

Implementation

Lessons from Acxiom

Expanding service offerings can be a daunting undertaking. It requires meticulous planning, particularly considering the organisation's current situation and its desired projections. This paper provides a plan for integrating new additional services into Smith's organisation. Attention is specifically paid to the steps the organisation can follow to seamlessly add new services, showing the appropriate transition path from its present state to its desired future state.

Implementing Service Expansion

Service expansion can be achieved by following three broad steps: 1) evaluation of the current situation; 2) defining the desired future state; 3) and implementation. The following section looks at each step individually.

Step 1: Evaluation of the Current Situation

The first step is the most crucial one. It involves the assessment of both the internal and external environment. The internal environment specifically relates to the strengths and weaknesses of the organisation (Hill & Jones, 2010). Attention is paid to the organisation's capabilities, current offerings, competitive advantage, financial strength, procedures, processes, structures, and other aspects specific to the organisation. In this case, for instance, Smith's organisation caters to 50 major business applications, fairly reliable computer and network equipment, an extremely flat organisational structure, a rapidly growing customer base, strong relationships with suppliers, as well as substantial competitive advantage in the hosting business. Nonetheless, significant weaknesses have emerged in the recent past, causing the organisation to start losing business to competitors. Notable issues include slow response times, service degradation, poor communication with clients, incompetent support staff, regular outages, and rising costs. Lack of a fully-developed marketing function also presents a major weakness. If not immediately addressed, these weaknesses could affect the reputation the organisation has built over the last five years.

The external environment involves a number of elements, including customers, opportunities and trends, as well as competitors and threats (Hill & Jones, 2010). Smith's organisation operates in the technology hosting industry. The organisation serves a wide array of clients in diverse verticals and industries. Service reliability, consistency, quality, and affordability are the three major needs of clients in the hosting business. Clients expect seamless internet connectivity and timely service at an affordable cost. Indeed, service providers in this industry build their competencies around these aspects. Players with the aforementioned competencies are better placed to take advantage of the opportunities in the market. The technology services industry has grown tremendously in the last few years, with business organisations in various sectors and industries, small and large, increasingly embracing cloud computing and other related services. The demand for technology services is expected to be even greater in the near future. This provides an important growth opportunity for Smith's organisation. Other opportunities stem from virtual reality, big data, social networking, e-commerce, outsourcing, and foreign markets (Bughin, Chui & Manyika, 2013).

A major threat for Smith's organisation, however, is competition. The organisation operates in a stiffly competitive industry. larger companies such as IBM, Microsoft, and Oracle, as well as thousands of small and medium-sized vendors, such as MCC Technology and Rackspace dominate the industry. Indeed, the threat of rivalry in this industry is strong. Ease of entry into the industry further compounds the threat for existing businesses. Smith's organisation now faces the threat of competition. With numerous options to choose from, clients may soon switch to other providers in search of better quality, efficiency, and cost. Other threats that may be worth consideration relate to the larger macroeconomic environment (political, legal, economic, social, and environmental factors). For instance, unfavourable economic occurrences such as recession may increase operating costs or reduce expenditure on technology. Additionally, with the organisation expanding its operations globally, risks such as political instability and legal difficulties cannot be ignored.

Step 2: Formulation of the Desired Future State

Understanding both the internal and external environment enables formulation of the desired future state, which denotes the goals the organisation wishes to achieve. From step 1, it is evident that the quality of services offered by Smith's organisation have been deteriorating in the recent past, affecting the organisation's financial performance. At the same time, however, it is also evident that the industry offers numerous opportunities for growth. Based on this premise, the future direction of the organisation can be determined. Smith's organisation desires to be the preferred provider of technology services and increase its service portfolio in the next five years. This goal can be broken down into the following specific objectives:

1. Increase capacity (staff as well as computer and network equipment) by 50%;

2. Increase hosted business applications from 50 to 70;

3. Increase customer base by 40%;

4. Reduce costs by 20%;

5. Increase customer satisfaction by 40%

Step 3: Implementation

The third step involves implementation. Essentially, this is the plan of action for achieving the desired future state. A sound plan of action is vital if the proposed future state is to be successfully achieved and sustained (Hill & Jones, 2010). In fact, most well-thought strategies fail due to poor implementation. Implementation involves a number of processes. One of the processes encompasses communicating the desired future position. It is important for everyone across the organisation to understand the objectives and projected of the organisation and the need to move from the status quo (Hayes, 2014). Without a shared understanding, the vision may not be effectively implemented. As members of staff would be directly involved in implementing the new services, they must have a clear understanding of the bigger picture. Communicating the formulated vision is not a mere one-time process. It would not be enough to articulate the vision via just a CEO presentation. The management of the organisation should make use of every available opportunity to communicate the desired future state -- from meetings and memos to team building activities and discussion forums.

Clear communication of the vision is important for a number of reasons. First, members of staff accept the need for change (Hayes, 2014); consequently, becoming more committed to it. Furthermore, as moving from the present state to the desired future state entails change, members of staff understand the urgency of the change in their roles and responsibilities in the change, and how the change will affect them. More importantly, effective communication provides a fruitful way of engaging employees, clarifying concerns, and minimising resistance to change.

Another step entails establishing a team to guide the implementation process. Forming an implementation team is important in ensuring accountability and smooth coordination of the entire process (Hayes, 2014). Responsibilities of the team would include developing the execution plan, defining the specific activities to be undertaken, collecting data, gathering the perspectives of staff members, supervising tasks, establishing key performance indicators, as well as monitoring progress among other practical aspects. The team would also be involved in preparing the budget as well as engaging key stakeholders, especially retailers, internet providers, outsourcing providers.

Measuring progress is a particularly crucial aspect of the implementation process. It would be vital to conduct an evaluation to determine how well the set objectives have been achieved. The objectives identified in step 2 would provide the basis for evaluation. Information relating to each objective (capacity, business applications, clients, costs, and customer satisfaction) would be collected at the beginning and end of the implementation period, which is five years in this case. It is, however, important to note that evaluation is an ongoing process, not a one-time event (Hill & Jones, 2010). Progress will be measured on an annual basis. Regular evaluation facilitates identification of successes and failures. The organisation then builds on the successes and remedies areas that require improvement. The graphic below summarises the three steps.