Introduction to Competitive Advantage in Information Systems

Data, Analytics, and Competitive Advantage

Anyone can acquire technology - but data is oftentimes considered a defensible source of competitive advantage. The data a firm can leverage is a true strategic asset when it's rare, valuable, imperfectly imitable, and lacking in substitutes.

If more data brings more accurate modeling, moving early to capture this rare asset can be the difference between a dominating firm and an also-ran. But be forewarned, there's no monopoly on math. Advantages based on capabilities and data that others can acquire will be short-lived. Those advances leveraged by the Red Sox were originally pioneered by the Oakland A's and are now used by nearly every team in the major leagues.

This doesn't mean that firms can ignore the importance data can play in lowering costs, increasing customer service, and other ways that boost performance. But differentiation will be key in distinguishing operationally effective data use from those efforts that can yield true strategic positioning.