When Assessing Digital Transformation Strategy, Competitive Intelligence is Vital

January 13, 2024

Whether you are considering your first digital transformation project, challenged by an implementation, or looking to better align existing digital strategies to market dynamics, competitive intelligence is essential. But what is competitive intelligence in this context?

In context of of a digital transformation strategy, competitive intelligence means 360o awareness of your business environment: with an emphasis on the external business environment.

As we note here, assessment and planning – the critical first step in any digital strategy – should establish performance measures and anticipated outcomes across four key areas:

  1. Business Environment
  2. Business Culture
  3. Business Processes
  4. Enterprise Architecture

In this post, we focus on the impact of the business environment, the role of competitive intelligence, and why it is essential to any transformational strategy.

What is Competitive intelligence? Competitive advantage.

While culture, process, and enterprise architecture (opportunities and constraints) drive much of the tactical decision-making in any digital transformation, it is your business environment – defined as your growth plans, product and service strategies, revenue goals, markets, and customers – that drives strategy.

Technology modernization, data flow improvements, process effectiveness, cost management, and other internal improvements are only valuable insofar as they achieve the goal of competitive advantage. They are inputs, not outcomes. They do not, on their own, produce competitive advantage, rather, they enable it.

There are only two sources of competitive advantage: the ability to learn more about our customers faster than the competition and the ability to turn that learning into action faster than the competition.
—Jack Welch

To properly assess, plan, and execute a digital transformation that produces meaningful results, an understanding of the business environment at a strategic level is paramount. Simply modernizing the tech stack or altering processes without thoughtful analysis will result in failure (as is the case with more than 70% of digital transformations).

What is Competitive intelligence? The transformational roadmap.

So, what is competitive intelligence? In this context, it is the ability to answer several critical questions concerning competitors, customers, and marketplace dynamics. Questions like:

  1. What strategies is the business using in its markets?
  2. What are the growth strategies and plans?
  3. Where is the leverage to enable increasing market share?
  4. What is impeding growth?
  5. What are your nearest competitors doing?
  6. What are the market dynamics?
  7. What are the customer engagement and satisfaction trends?
  8. How does the business intend to stay competitive in the future?
  9. What and where are the critical inflection points?
  10. What is the ultimate goal of the proposed transformation?

The answer to these questions is a primary driver of function, design, risk analysis, and ultimately, how the current vs. future state of the business can be defined, measured, and improved.

Broadly speaking, competitive intelligence informs the roadmap from your

current state to a future state where you can know your customers better than the competition (external factors) and act on that knowledge faster than the competition (internal factors).

This requires a careful and dispassionate analysis of your existing threats, opportunities, weaknesses, and strengths: a “TOWS” analysis. (Again, emphasis on the externalities.) The goal is to maximize your opportunities and strengths to gain competitive advantage and minimize any weaknesses to counter threats.

The Bottom line: you need 360O situational awareness that is relevant and actionable as well as the means to measure and validate the impact of the digital transformation strategy – or your weaknesses and threats will likely never be resolved and your opportunities and strengths never fully leveraged.

The goal of the T42 Assessment and Planning services is to ensure that your digital transformation is aligned with your business growth strategy in a way that minimizes disruption and risk and maximizes outcomes.


About Transform 42 Inc.

T42 is a digital transformation specialist relentlessly focused on delivering targeted, measurable, and sustainable outcomes against clearly defined success metrics. Deploying a people-first strategy, we implement tooling, modernization, and process enhancement that enable people to interpret, develop insights, and act on that data to better serve the business and its customers.

T42 partners with our clients to design and implement digital strategies that survive growth and change.

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Serving as your trusted partner in IT Consulting, Transform42 Inc. focuses on delivering measurable outcomes through Agile Transformation and Digital Product Design. We pride ourselves on the quality and reliability of our tailor-made solutions.

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