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Everyone is looking for a competitive advantage, an edge over the firms offering similar services.
Often those competitors are offering essentially the same services, with the same processes, and the same infrastructure…but…how one implements and uses practice technology is an area that often has untapped potential to provide business advantages.
When it comes to deciding HOW you wish to compete strategically there are not that many choices really. You can:
- Do new things the competitors are not doing
- Decide not to do things that everyone else is doing and taking for granted
- Do the same things as everyone else, but much much better than them
- Do the same things as everyone else, but much cheaper than them
Whichever of these broad strategies a practice decides to pursue it should be a given that how we adopt and utilise our technology resources will make a huge difference to our success. In fact, it is so important in helping to execute a good strategy that how we use technology can in itself become a competitive advantage.
Let’s take a simple example of 2 practices who both wish to offer comprehensive fee-based advice where the client pays them directly, and there are no commissions or leveraged income streams involved for either practice.
Let’s assume for the sake of the example that both are broadly pursuing the strategy of “delivering advice and service better than our competitors do“, and also that both would actually like to be profitable while doing so. Therefore both have to pass on their overhead costs to the clients within their fees.
Practice A has a CRM system, and a branded email marketing system, and a virtual meeting software platform, and a social media management platform, and a risk profiling system, and a content/resource management system, and a text/phone recording & filing system. It needs all of these to effectively deliver advice and ongoing communications to its clients in its pursuit of doing it better than competitors. Each of these comes with a separate cost in terms of ongoing licensing. Each of these comes with a separate cost in terms of productivity loss for training. Each of these must be managed by a human at some point, who switches back and forth between various systems.
Practice B has the same requirements and same objective. It figured out though that the CRM system it has actually has the ability to handle every single one of those functions that Practice A is buying separate systems for.
Practice B also figured out that it could set up rules and workflows within its single system to ensure that no critical step can ever be missed in the delivery of advice or in communicating with clients. In broad terms it has probably spent about the same amount of non-productive staff time in building its own workflows and processes in a single system as Practice A spent on teaching people how to use multiple systems.
The multitude of systems which Practice A uses exponentially increases the risk of human error in the form of omitting client data, or missing key communication steps, or failing to deliver news or advice in a short timeframe. Practice B has essentially eliminated those risks. It is probable also that Practice B has lower ongoing technology expense than Practice A, even though it may appear at first glance that Practice B is paying more than Practice A for what is essentially the same CRM system.
Which of the two is best able to deliver superb service at the lower fee level? Or perhaps not at a lower level, but at a fatter profit margin? Or perhaps able to keep its fee’s stable for longer? Or perhaps able to deliver more services and client facing time within a comparable fee structure?
This is a single (and simple) example of how 2 professional firms might approach the adoption and implementation of technology within their practice, and yet one of them is able to turn it into a competitive advantage.
On the off chance that you feel my example is a bit of an exaggeration with Practice A, a good friend of mine who is in the business of helping financial advisers with their practice management compliance has found from working with hundreds of advisers that the average advice practice in this part of the world has 17 different IT platforms or systems which it is using as part of its client management strategy.
17 pieces of software.
That is ridiculous.
That is your competition.
How you use technology can definitely provide a competitive advantage over them, surely?
Related: Is Your Value Proposition Consistent With Your Strategy?