We share this article with you on transformation by Frank Diana who heads the Digital Enterprise Solutions team at TCS’ Global Consulting Services.
Continuing with this closer look at transformation, part three focuses on differentiation; the fourth forcing function. Differentiation is a process that showcases the differences between products and services. It looks to make an offering more attractive by contrasting its unique qualities with other competing offerings. Successful differentiation should create competitive advantage, as customers view these offerings as unique or superior. In his piece on The Future of Enterprise IT, Geoffrey Moore, famous author of “Crossing the Chasm” describes the global business dynamics (Slide 10) that places differentiation at the center of a virtuous (perhaps vicious) cycle. His key message is that globalization and rapid commoditization are placing greater emphasis on differentiation, especially in developed economies.
As a reminder, forcing functions are those things that force the enterprise to invest in a future state. The changing ways companies must differentiate in the future is driving a compelling need for investment. In the case of differentiation, the key drivers behind this forcing function are:
- Rapid commoditization
- A growing number of product and service alternatives
- Eroding barriers to entry
- Ten times the number of innovators at one tenth the cost
- Start-ups and Internet Companies entering non-traditional businesses
- New non-traditional market entrants
- Higher customer expectations
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