Too much of a good thing technology’s real competitive advantage

“A great NOW will be a great WAS! A bad NOW will always be a bad WAS, and all you can hope for is a Great GONNA BE!”—Sid Caesar, Author

Over the last five years, there has been increased take-up of technology and, in many regards, this has fostered ongoing sector changes. We now see technology applied across the sector—mobile apps, management systems, AI and data, IoT, robots—the list goes on.

It’s safe to say, technology underpins much of what we do today. With our processes increasingly automated, technology organises our operations and value chains, and it links the older Australians who we look after with their families.

The pandemic has highlighted the important role technology plays in our sector, and as such, it is a vital resource to organisational success. Equally, with ongoing reforms, the need to update technology systems, payment systems, data collection and the like, is a focal theme.

At progressive provider organisations, executives are well versed in understanding technology’s value to their business, and it is no coincidence that there is increased interest from consulting firms to help providers leverage digital tools to help them differentiate and compete. The premise here is that technology’s ubiquity gives it strategic value.

Many have upheld this premise, and it’s a mistake. What truly gives organisations a competitive advantage is not ubiquity, but instead, scarcity. In short, you only gain an advantage if you can do something that your competitors can’t replicate or do.

Being a care sector, much of the technology we use is procured. Additionally, a simple scan of sector technology vendors leads to a reasonable conclusion that much of what is used and needed by the sector in delivering care is available and attainable.

Coupled with ongoing reforms that are prospectively requiring technology as part of sector operational and governance compliance, technology is fast becoming a commodity input of service delivery rather than a true strategic resource.

Providers that adopted technology early enjoyed a competitive advantage for a brief period. However, this only lasts until competitors adopt similar technology solutions, or outright engage the same technology vendor and suite of solutions. In many cases, much of the thinking regarding technology’s competitive advantages amounts to a misunderstanding between:

Head of innovAGEING, Merlin Kong, with Natasha Chadwick, Founder and CEO of NewDirection Care, Will Burkitt, Lead Partner of Care & Living with Mercer, and Emma Small CoFounder of Risk Managed presenting an innovAGEING Insights webinar series on innovation leadership.

• Proprietary technologies—technologies that an organisation owns itself, eg. medication patents, and in-house processes. • Infrastructure technologies—technologies that create greater value when shared and standardised, eg. railways, power generation, telecommunication lines. Many of the digital tools we acquire in our sector amount to infrastructure technology. Still, providers can move ahead of their competitors if they:

• Have good insight on the use applications of a new technology for their organisation. • Leverage the high initial cost of the new technology as a barrier for others. • Take advantage of lower standards in some aspect of sector service delivery.

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The lesson here lies in understanding that the perceived advantage of new technology is likely to be brief. It only lasts until it is widely appreciated, receives investment, and is easily adopted.

Furthermore, if it becomes a government regulation and compliance requirement to operate in the sector, all competitive advantage is wiped out. In such a scenario, universal standards and formal best practices are established, which in turn, make proprietary technologies obsolete.

It’s no wonder then why governments have an interest in requiring technology—while infrastructure technologies may have minimal to no competitive advantage to provider organisations, they can lift care standards at a macrolevel.

When an organisation finds that its resource becomes vital to having a seat at the sector table, but with minimal strategic competitive impact, the risks it creates become more important than the advantages it brings. Take for example the following:

• Technical failures and glitches • Unreliable vendors and partners • Security breaches • Obsolescence • Outages • Supplier power Yet, in the present sector operating climate, the biggest risk of all is overspending. Traditionally, much of this overspending was largely vendor-driven upselling.

The truth is, with the rapid introduction of new technologies, the smartest organisations:

• Avoid the chorus of tech hype and the cutting edge • Hold off purchases until standards and best practices are established • Wait until prices fall By doing so, they let their competitors expend the high acquisition and experimentation costs of being a first mover— only to overtake them with technologies that work, are quickly adopted, and cost less.

For most in our sector, this is the true strategic advantage when it comes to technology.

Merlin Kong is Head of innovAGEING and Interim Director of the Centre for Workforce Development & Innovation, Leading Age Services Australia. For more information visit www.innovageing.org.au Merlin was recognised by the Australasian Society of Association Executives as an Association Influencer 2020.