PODCAST: Listen to Kareem Tawansi and Brett Raven discuss the nuances of what makes a business unique
For-profit businesses tend to exist to provide goods, services or both. So the question is, why is there more than one business out there selling each good or service? Generally speaking, businesses try and differentiate themselves by either providing something unique or by offering their goods and/or services at a uniquely low price. Offering goods and/or services at a low price is generally thought of as being a factor of scale, usually due to the availability of capital, and while this is often the case there is usually something unique or innovative in the underlying processes, such as logistics or the way items are manufactured.
The other route to market is by offering something new, novel or innovative. Usually this is paired with an early mover’s advantage. In this instance, it could be a new product or service, or even just a new method of providing a service or a new angle on a product. This often comes as a result of research and development, which once again requires upfront capital. And often, the novelty wears off as new players start copying the innovation and eventually it becomes commoditised. At this stage either a (or multiple) system(s) of record or an industry-specific software package will be developed and adopted by the market.
So if your business has neither of these, then it’s unlikely it will survive for long. That begs the question, how do you crystallise your uniqueness? In the 21st century nearly all businesses are on some kind of digitisation journey. Most businesses will encapsulate their non-unique processes in standard software systems (often referred to as Commercial Off The Shelf or COTS Software.) These are usually systems of record, like ERP, CRM or eCommerce. This is usually the case for the most standard areas of a business such as finance, HR, etc. On top of this, there may be industry specific software that provides for the digitisation of the necessary elements of process for a particular industry (such as Student Management systems in Education or Point Of Sales systems in Retail). But what do you do about the unique parts of your business, the parts that only your company provides and the reason why many of your customers choose you when purchasing that specific good or service?
In our modern digital world there is nothing more powerful than crystallising our uniqueness through the development of a custom software solution (a bespoke system). That solution might be a mobile, web or desktop app, or it might be the custom implementation of some COTS software, or even a unique integration of all of the above. It is not written in black and white when to use either approach, and of course there are pros and cons to both. For speed to market and lower upfront investment costs, COTS is usually the best choice. However, COTS systems can sometimes be rigid and difficult to customise and they might not meet all of your requirements. Custom-built or bespoke solutions on the other hand, provide more flexibility and give the ability to drive future development. Having said that, they can cost more and are likely to take a longer time to market. The trick is understanding the pros and cons of both and recognising which approach would be the best fit for your business in crystallising your uniqueness.