The Advantages of an Advantage in Digital Transformation

Those that lead are able to collect and analyze data that followers can’t.  Think about the first climber to reach the top of the mountain, they have a new and different view slower followers don’t.  If you believe, as I do, that understanding data is the secret sauce of the digitally transformed enterprise, then having data not available to your competitors is a treasure!  

Those that achieve digital transformation before their competitors will have advantages - and advantages have advantages. Not only do they have new experiences and new data to analyze and understand, they are able to develop and implement new strategies that make no sense to slower competitors without access to the new data.  The digitally transformed can act on data invisible to slower competitors.

Think about the data Apple was able to collect and analyze on their iPhone in the years before Blackberry responded with their first smartphone.  Apple was quickly moving on to improving smartphones and adding new features, while Blackberry was still trying to develop their first.  Apple had a data enhanced view far different and more advantageous than Blackberry’s.

Data analyzed by slower competitors does not lead them to the same conclusions as faster and digitally transformed competitors.  The data of slower competitors provides an out-of-date view of the market based only on the limited data they have access to.

Companies that digitally transform before their competition receive the benefits of what I call the A2s (advantages have advantages) phenomena.  Competitive advantages provide new opportunities, which provide their own new advantages.  It is a snowball effect where those that digitally transform early benefit from the A2s phenomena, and at an accelerating pace.

Opportunity costs, is a term economists use to describe the loss of potential gain from X investment, when Y investment is chosen.  When enterprises decide to respond slowly or not at all to a competitor’s digital transformation, the opportunity cost is the loss of the A2s phenomena and associated benefits.

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