Another fascinating question from one of my strategy network forums: What is a company’s core competency? It sounds easy enough, but from some of the responses provided, it seems clear to me that there’s a lot of confusion around what a company’s core competency is, let alone how to go about identifying it!

This could be tremendously detailed and complex, but it sounds like the colleague posing the question is looking for a basic answer to a basic question: how does a company identify what its core competency is? If a company only does one thing, then it’s pretty easy, but as organizations are growing they often take on many different activities, and can lose sight of what they started out to do. Often some of these ‘extra’ activities are necessary in the early days to support the key activity, but over time, as practices, structure and expectations grow around these activities, the ‘extras’  take on a life of their own. I could probably write pages on this tangent alone, but here’s my simple answer to the basic question:

A company’s core competency is whatever it is that they do that no other company can do the same way, and that can’t be outsourced to anyone else. (Some would add that there should be a customer/client demand for the product or service as well, but there’s also the argument that if you have a unique product/service, you can always create a market!)

I’ve told clients and colleagues in the past: if you’re doing something that someone else can do better, faster or cheaper, then get out of that business – that’s not your core competency, no matter how much you may like to do that or how long you’ve been doing it. Once a company knows what it exists for and clearly understands their core competency, making strategic decisions becomes a much easier activity!

What about your company – does this simple rule apply and if not, how would you define your organization’s core competency?

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As I rapidly approach the 30 year point of holding progressively advanced IT roles, I have to reflect on the changes that have taken place during these years.  These changes are not only in the way we define technology or the way we use technology, but more significantly in the way we view business.  At the risk of sounding as old as my driver’s license states, I have to admit that some of the old adages now ring true – everything old becomes new again.

 When I started my business career, it wasn’t in IT – I started in bank management.  Technology at that time consisted of manual and electronic adding machines and typewriters.  I remember the excitement when the bank moved to automated posting terminals for tellers, and everyone had to learn to enter on keyboards rather than manually process stacks of cash, cheques and adding machine tapes.  It wasn’t easy for many of the tellers who had spent decades handling paper, but the inherent value of automating the transactions to provide faster information and to reduce errors was recognized.  The business value of introducing the technology was a strong driver for change and ensured that the role of technology was positioned appropriately for all staff.  Discussing alignment of business and technology was not necessary: technology existed to support business priorities.  My ’30 years in IT’ started after this experience.  Like so many in the late 70s, the fascination with technology lead me away from the safe world of business into the new world of ‘DP’ – data processing, the parent of ‘IT’ – information technology. 

 When I look back over the past 30 years and then forward into the near future, I see a business environment that looks very different from where I started, but is perhaps more closely aligned than ever before.  Business is coming out of its infatuation with all things technological and has embraced technology as a normal business tool to be used strategically to accomplish business objectives.  Alignment is properly positioned to ensure that technology activities, decisions and services exist as a result of, and in support of, business activities.  Helping organizations through this transition to emerge fully capable requires more than good business planning or good technology management.  Organizations need a new approach that combines strategic planning, business process reviews, organizational management and information management with a capable, integrated technology infrastructure and service environment.  We are on the verge of a new era where business and technology are synchronized in their goals, objectives and direction – true Business/IT Alignment.

It’s taken many years for the business environment to reach the point where there was a good, general understanding of IT services such as programming, networking, databases, communications, implementations. As technology has become more pervasive in society and business has become more knowledgeable about those technologies, it has become easier for IT service companies to explain their specific services to clients. Just as we think we’ve finally grasped ‘information technology’, however, new challenges are emerging in defining and explaining ‘business technology’.

With BT we shift the focus away from the technology at the centre, to business at the centre. Some would argue this has always been the case, but in reality, for many years, the singular ‘coolness’ of rapidly evolving technologies has been driving its own evolution, with business value and benefits more of an afterthought. BT re-sets the use of technology as a core enabler of business to create a new phrase: ‘technology-enabled business’. As we move into this new era of BT, however, we also move into new areas of skills and analytical expertise such as business process, investment value, organizational models and performance assessments. Now IT (or BT) service companies need to learn how to present these services in new terms, not as separate from IT but as a natural extension and evolution to BT. Business/IT Alignment provides a framework for integrating technologies into a business-focused agenda.

If you’re struggling with the role of technology in your organization, and trying to reconcile this with the increasing demand for planning, organizational changes, analysis and assessment, then contact me to arrange a BITA assessment, and move your organization into the new BT movement!

I’ve just come back from an IT Governance conference presented by ISACA and ITGI, and I don’t think I’ve ever heard as many references to Business/IT Alignment in such a short period of time!  I know I’ve been saying for a couple of years that this is the up&coming hot topic, but it appears to be pervasive now.  Every organization, industry and executive is searching for the elusive ‘holy grail’ that will provide alignment of their business strategy with the IT agenda.  Unfortunately, most of them are looking in the wrong place – trying desperately to take something that currently exists in IT and turn it into a magic bullet for alignment.  It’s just a matter of time before they reach the same conclusion I did some time ago: Business/IT Alignment isn’t a one time project, but a change to the culture, communications and business processes within an organization.  We have a distinct advantage for taking this to our clients because we’re (still) ahead of the pack.   Now we just need to find the clients who are ready to ask the right questions!