Translating technological advances into a strategic advantage.
Modern age technologies have a considerable impact on everything, from individuals to businesses, addressing broader, more obscure problems. For most enterprises, technology might not be of the utmost importance when it comes to their competitive strategy. But, their current IT solutions may hold them back from staying ahead of the game. The right choice and integration of technology in this way can be constructive, assisting decision-makers to get what they want and gain access to untapped markets.
Technologies like artificial intelligence, big data, and advanced analytics, among others, are always at the forefront of every company’s agenda. As such technologies are exerting profound changes in the way people live and work; they are also impacting all disciplines, economies and industries around the world.
However, it doesn’t matter how advanced technology businesses are using, it doesn’t guarantee a competitive advantage. Thus, to enhance business strategy, organizations must consider an “integrated strategy machine.” As noted by BCG, an integrated strategy machine is a collection of resources, both technological and human, that intend to develop and deploy business strategy. This approach to effective business strategy involves an array of conceptual and analytical operations, including problem definition, signal processing, pattern recognition, abstraction and conceptualization, analysis, and prediction, that connect into a seamless whole. This arrangement of individual operations toward the overall goal makes the strategy machine integrated.
There is no wonder that machines and algorithms are able to create an effectual strategy that business leaders seek. Despite this, the integrated strategy machine must be designed by humans. People are still inimitable in their capacity to think out of the box for the immediate scope of a task or problem.
According to the blog post, e-commerce giant Amazon is a perfect example of an integrated strategy machine. The company has around 21 data science systems, of which many for supply chain optimization, an inventory forecasting system, a sales forecasting system, a profit optimization system, a recommendation engine, and others. These systems are tangled with each other and with human strategists to create an integrated, well-oiled machine.
To develop an effective integrated strategy machine, BCG Henderson Institute’s Chairman Martin Reeves and consultant Daichi Ueda identified six requirements:
– A Relevant, Specific Strategic Aim: The integrated strategy machine must be directed at a relevant aim and the desired outcome.
– A Design Appropriate to the Aim: Just like different environments demand different strategies, different strategies demand different designs of the integrated strategy machine.
– An Integrated Approach: The components of the machine, both human and technological, must communicate with each other to create an integrated whole.
– The Right Human-Machine Division of Labor: In an effective strategy machine, human beings and machines must each do what they are good at.
– A Well-Designed Human-Machine Interface: With the right human-machine interface, the strategy machine can benefit from an appropriate division of labor.
– Unique Tools, Data, People, or Process: The strategy machine has not fulfilled its ultimate purpose if it does not create an advantage. To do so, it must do something better, whether it is the tools, the data, the people, or the design.