How to Create a Competitive Advantage Through Software Development
Companies are doing an increasingly effective job of ensuring their software investments reinforce their competitive advantages. Most companies are past the “we need an app” stage. However, many leaders are still clinging to the next big thing. For example, you might hear: “We need a blockchain” or “Do we have machine learning capabilities?” »
If innovation is a differentiating factor for your company, it is obviously normal to experiment with different software solutions to accentuate your competitive advantage. However, for most, leading with technology is more like putting the cart before the horse.
You can’t use every emerging technology, and neither should you. In fact, technology consultant Jeffrey Funk found that many recent AI solutions aren’t as useful as the hype suggests. If you want to activate the best facets of your operations and increase the value of your business, you need to focus your software development initiatives on impactful targets.
Find the real differentiator
Trying to determine if your competitive advantage is visible in your software investments? To start, you need to be explicit about your competitive advantage. Did you write it? Is this what is expressed in reality? Would your customers agree?
Even if you consider yourself an innovator in a field, it doesn’t matter if your customers disagree.
To them, you may be nothing more than a large-scale player with high switching costs. In this case, you must either align your vision with reality or take the necessary steps to change perceptions.
Understand user perceptions
Data can certainly help you understand where opinions lie. The software provides many data points that are not readily available in other business support tools, so it behooves you to use them to assess whether your competitive advantages are materializing. For example, is customer service the differentiator? Does this resonate when you look at your self-service and support statistics? What about network effects? How many hooks to other systems do you see per customer?
Likewise, you can use some qualitative points to help you determine if your end users feel what you expect. It’s worth checking consumer sites and message boards relevant to your business to check sentiment regarding customer experience and service. Despite some outliers, does it meet your expectations? Once you understand your true strengths, you can explore technology initiatives that reinforce your competitive advantages.
Leverage software development
Software development is not something to be taken lightly; it is a significant investment. However, it can offer many benefits for your business. With that in mind, here are some tactics to ensure your software enables operations and increases the value of your business:
1. Build on your strengths.
Competitive advantages diminish over time due to the nature of the market. As they bring you back and strengthen your position, your rivals will follow suit. However, all is not lost. One way to keep your edge is to keep innovating on your strengths. Internal and external software is the key to improving your value.
Remember that software development doesn’t happen overnight or all at once, so you’ll need to be selective when investing in technology.
Companies that use technology to gain a competitive advantage often focus on a specific area of business, such as customer relations or human resources, which they believe separates them from their peers. For example, customer relationship management systems help centralize communications and provide the ability to gather insights about customers. You can use this information for segmentation purposes and then start delivering more personalized experiences.
Alternatively, you might consider investing in technology for HR. This department’s software can offer information about your available staff, which improves the employee experience and supports retention efforts. Once you understand your strengths, you can choose an area to support with a software solution.
2. Facilitate customer interactions.
Customers are increasingly looking for digital ways to interact with your business. If people have problems or raise concerns, they expect quick responses. But not just from chatbots and phone menus. If the problem is too complex to be handled by automation, people want to connect seamlessly with real workers who can offer personalized assistance. Leaving this area of operations exclusively to digital touchpoints does nothing to advance your customer engagement strategy.
Customer engagement software facilitates and centralizes communications with customers. These solutions use a variety of channels and touchpoints to enable customer interactions and provide a relevant end-to-end experience. With this solution in place, it becomes much easier to deploy conversational marketing, build a relevant social media presence, and deliver personalized messages to your target audience.
If you’re still unsure what your audience wants and needs, check out customer data.
You can also go straight to the source and ask for feedback with surveys or quizzes. For example, ask your customers what they think of your product and service offerings and find out what pain points they might encounter.
3. Pay attention to how employees use tools.
Although it goes without saying, your employees anticipate digital tools to improve their productivity and facilitate their daily responsibilities. If you don’t invest in technology that enable your tasks, the lack of support becomes a workplace detractor. Unfortunately, many companies seem to be floundering on this front, especially with communication tools. According to a Slack study, only 31% of workers say they are “extremely satisfied” with what is available to them. More importantly, 71% expect more tools in the future.
To avoid a similar problem, chart your current benefits. Then follow up with a technology strategy that extends those benefits into the future. If you opt for software development, consider the user experience as well.
Workflow software should always meet your team’s needs, not just tick an arbitrary box for operations.
Otherwise, the competitive advantage will be lost and the software solution may even sit idle in favor of in-house workarounds.
4. Don’t reinvent the wheel.
No one would expect you to make a new word processor. Similarly, you shouldn’t think about creating a new internal chat unless it’s integrated with a suite of other tools and meets people where they work.
Be smart about what you can buy now rather than building later.
See what you can configure with ready-to-use business solutions to meet your business needs. Off-the-shelf software may be less agile, but it can be a short-term solution to today’s problems. If your needs change, you can explore custom software opportunities.
The world is increasingly digital, but you shouldn’t invest in technology for technology’s sake. Instead, you should pursue software development initiatives that boost your competitive advantage.
Image Credit: by Luke Peters; Unsplash; Thanks.