Speeding up competitive advantage in the digital economy

Domino Pizza determined that in a commodity business, the best way to gain competitive advantage was to deliver a better customer experience.

Businesses’ incumbents often respond to digital competition by embracing methodologies like agility, building innovation centers separate the parent company, acquiring startups or outsourcing app development to consulting firms.

Mastering technology

In the digital era, who ever built the best software, would win. Amazon and Tesla which are the leading technology companies, have built their own software development teams and empower developers to help differentiate and gain competitive advantages so as to promptly satisfy their customers’ rising needs.

Unfortunately, many companies have never viewed software development as a core competency. They often rely on packaged programs sold by independent software vendors and/or hire consultants to write customized code. However, such packaged programs are one-size-fits-all and can’t be customized very much. That might be okay for back-end systems like human resources and financials, but for customer-facing parts of the business, using off-the-shelf software no longer cuts it.

When outsourcing or purchasing software, companies must cope with the fact that those software might be easily imitated by their competitors. In addition, companies must depend on software developers in case of changing any feature of software. Such change may take months, even years, while it takes only some weeks or even some days to reach such change when mastering software.

For example, Domino Pizza determined that in a commodity business, the best way to gain competitive advantage was to deliver a better customer experience. That meant having better software and great mobile apps for smartphones. Domino Pizza expanded its development organization 10-fold and integrated software developers with marketing teams. Together they created innovative apps and features, including one that lets customers track the progress of their order pizza oven to their front door. Great software enabled Domino to leap ahead of its competitors and become the biggest pizza chain in America.

Focus put on digital human resource

In order to build competitive advantages in the digital economy, companies must build their own software development teams and empower developers to be creative problem-solvers. Companies can start by reskilling existing tech staff. These people are among your most valuable employees, but often are an untapped resource.

Besides, companies also must recruit and retain top-tier software engineers. However, for non-tech companies, luring great software developers often hurts major challenges. To attract these developers, first of all, companies’ incumbents must change the way they view developers. The best engineers won’t work for a company that treats them like “code monkeys” - stuck in some back office, churning out code on command. So, engineers must be facilitated in strategic problem solving and decision-making, while giving them a voice in shaping the future of the company, and the freedom and autonomy to be creative. To make this work, you have to change the mindset of the entire organization. The commitment must start at the top.

Every organization will embrace the builder’s mindset in its own way. But in the volatile business environment, these principles provide a framework for building a world-class software development organization, so your company can respond faster to customer needs, adapt to a constantly changing market, and keep up with durable development.