This article is reprinted from The Consulting Journal
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Methods: Following the herd
by David Blakey
Clients may want to buy systems and services because their competitors have bought them. They might lose more than they gain.
[Monday 3 December 2007]
Many clients want to do something because their competitors are doing it. They may want to outsource a department or function because their competitors have done it. They may want a new software package because their competitors have installed it. They may want to add a new job position or remove an existing one because their competitors have done that.
You may be able to get clients to assess these changes dispassionately, by using a SWOT analysis. Many organizations only use SWOT when they are preparing a new strategic plan. They can — and should — apply SWOT to any new initiative. A SWOT analysis can be done on a narrow view of a single layer of the business.
Imagine that your client wants to purchase a new online service. Instead of conducting a SWOT analysis on the new service, they should analyze the current systems and methods.
Is the current method a strength? Does the current method, without the new service, give your client an edge?
If your client is really keen to purchase the new service, this may be a difficult question for them to answer. Some old software systems and even some manual systems may work better for your client.
If your client uses the same service as its competitors, will some current strengths be lost?
This really another way of asking if the service will provide a commodity. If the current method and new service are both pure commodities, without any impact on the bottom line, the decision is largely financial.
Does the current method weaken your client's competitive position? If it does not, then your client should look closely at the real reasons for wanting the change. In my experience, many managers want new services so that, when they meet competitors socially, they can say We're using XYZ, too
. That is hardly a sound justification.
If your client really can claim that the current method weakens its position, then they need to start a process that will end with the purchase of an alternative, rather than having a process that consists solely of purchasing a single predetermined alternative.
Is delivery the major factor? If the new service delivers information in a better format or in a shorter time than the current method, it may be that current method should be enhanced rather than replaced.
Does the current method present opportunities that the new service will not? Are there things that your client will lose if they use the new service?
The new service may be comprehensive or basic. It might allow your client to do everything that they do now, or it might require additions in order to match the current method. A truly comprehensive service will have been developed to provide all functions as a commodity. It will not provide any competitive advantage to its users. A basic service may deal with those functions that are commodities: the competitive advantage will be gained through additional software or services.
Replacing the current method with a comprehensive service will lose any competitive advantage of the current method. Supporting the current method with a basic service may allow any advantage to continue.
Is the current method a threat or risk to the business? One of the advantages of an online service is that data is held outside the client's systems and premises. The current method may be seen as a threat because data can be more easily lost. It may also be more difficult for an unauthorized or unscrupulous person to make copies of the data. If this is a factor in the decision, then it may be better for the client to concentrate on securing the current method better.
Some online services allow customers to feed information into their own websites or to build their websites around the services. Because the services are made for a particular industry or sector, the same data are held for each customer, with little opportunity to add other data. So the websites of those customers tend to have the same characteristics. Their look and feel
is distinguished only by the design and layout of the web pages. The information presented on those pages looks the same. It is easy for consultants in that industry to identify the underlying service. None the websites presents any unique information to its visitors. These services are often sold to customers on basis that they will be able to hold information in a single central location and use it throughout their business systems, their websites and their own web services. Customers may not realise that they will only be able to present the information that the services hold.
It may be better for a customer with separate business systems and websites to consider bringing the two existing systems together, instead of replacing them.
Clients need to understand the reasons for their purchases. They need to appreciate the need for solid business justifications for any change. They need to know that many products and services will restrict the amount of information that they can present to the world. They need to understand that being competitive does not mean doing what everyone else is doing.
The opinions expressed are solely those of the author.
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