One of my favorite dialogues from Alice in the wonderland is:

“Alice came to a fork in the road. ‘Which road do I take?' she asked.

'Where do you want to go?' responded the Cheshire Cat.

'I don't know,' Alice answered.

'Then,' said the Cat, 'it doesn't matter.”

― Lewis Carroll, Alice in Wonderland

In order for any decisions to be made it is very important that we know where we want to go. Probably setting these strategic goals is the most important thing for any enterprise. Once you have set these strategic landmarks explicitly, the decision making process becomes a lot easier. Strategy as pointed out by Vijay Govindarajan used to be about protecting competitive advantage, but not anymore. Today it is about finding the next advantage.

This takes me back to Alice in the Wonderland:

“My dear, here we must run as fast as we can, just to stay in place. And if you wish to go anywhere you must run twice as fast as that.”

― Lewis Carroll, Alice in Wonderland

One has to be in synch with the technology fully aware of the new landscape and ahead of the competitors to achieve and maintain any form of competitive advantage.

In order to determine which road to take and how fast to run to maintain a competitive advantage, one would have the answer three primary questions:

Why, What and How.

Why

Technology is entering a new phase; just consider the web as an example.

John Markoff of the New York Times suggested naming this third-generation of the Web, “Web 3.0”. So far, while the web has become an integral part of our life, the information contained on the web today lacks structure thus limiting its potential use. Web 3.0 on the contrary will be read-write-execute web where AI (Artificial Intelligence) and self -learning will go hand-in-hand. This will give rise to a hyperconnected age with emphasis on machine-facilitated understanding of information in order to provide a more productive and intuitive user experience.

Now you could ride on this new wave of technology to create value, protect your competitive advantage or even translating this opportunity into the next advantage or you could stay put and get obliterated. These advancements in technology and the changing landscape present an opportunity as well as a threat, the choice is yours.

What

The second key decision is "What". What steps you need to take as a company and what areas do you invest in to grab this opportunity and translate it into an advantage. IT funding has traditionally been distributed into four key areas:

• Strategic
• Informational
• Transactional
• Infrastructure

It is to be noted here that as in any other investment there is a direct relationship between return and risk. Higher is the risk, higher is the return. Strategic and infrastructure investments tend to fall in the higher risk side of the spectrum followed by informational and transactional being the least risky of them. Having said that being the least risky or having minimum return does not by any means imply it is any less important. Quite the contrary, it is probably the most important and key step towards the long term agility, involving identification of the key processes and resources and defining initiatives towards their automation.

It also depends on the nature of your business, what kind of an operating model do you have in place and how prepared are you for these advancements. There is no "one size fits all" solution to this problem and an analysis has to be made on a case to case basis.

How

Lastly the most important question, how to add value. Technology can primarily value through:

• Standardization
• Reduction of Variance
• Granularization
• Individualization
• Gamification

Whether you want to go the more traditional and conventional way of adding value through Standardization and Reduction of Variance, or you want to use a more modern approach of utilizing the other three options, it depends upon the type of company, the nature of business and your strategic goals.

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