The IT Application Strategy to Support the Company's Growth Strategy

Highlights

  • PACE is an IT application strategy that aligns software technologies with business outcomes. It works especially well with business growth strategies.
  • It aligns the methods business leaders use to create competitive advantages with systems that empower and accelerate those advantages.
  • The benefit of the PACE IT application strategy is that it allocates more investment to the technologies that drive the most business value and less investment toward those that don't deliver differentiation or competitive business advantages.
Johnny Grow Revenue Growth Consulting

The PACE IT Application Strategy

PACE is a technology strategy that aligns business benefits with system capabilities.

PACE Technology Strategy

More specifically, the PACE model aligns the methods business leaders use to create competitive advantage, described in terms of common ideas, different ideas and new ideas, with a technology portfolio that segments business applications and related technologies into layers called Systems of Record, Systems of Differentiation and Systems of Innovation. This technology strategy is very helpful when defining your RevTech stack.

A

Systems of Record

These systems are important as they provide a solid, secure and scalable foundation. But by themselves they generally provide little to no business differentiation in the competitive marketplace. As an example, Customer Relationship Management software capabilities in this layer include foundational components that perform core processing (i.e., account management, opportunity management, case management, campaign management), safeguard data integrity and ensure compliance.

These type of platform capabilities benefit the company by incurring fewer changes and longer life cycles. As a result, change governance discourages and limits changes and continued investment to components in this layer. Cloud CRM systems deliver periodic updates of innovation, but these releases are iterative and incremental, not wholesale changes or replacement to the underlying application.

B

Systems of Differentiation

These systems support the company's different ideas. For most companies, different ideas permit the company to improve operations, outperform competitors, or take customers and market share from competitors. The business benefits are worthwhile but often temporary. In many cases, the benefits are a zero-sum game.

CRM software examples that support different ideas may include improvements in marketing campaigns (i.e., behavior tracking, lead scoring, intent signals), CPQ automation, revenue growth analytics, a Next Best Offer (NBO) algorithm or a customer self-service knowledgebase. If the underlying CRM system is a broader platform solution, then individual applications from the CRM ecosystem are quite often systems of differentiation.

C

Systems of Innovation

These systems support new business ideas – for new products or services, new markets and new revenue streams. Where systems of differentiation provide incremental improvements, systems of innovation deliver order of magnitude gains.

CRM software examples that support new ideas may include unique methods of personalized social engagement, crowd sourcing of innovative new products or services, delivery of relevant, personalized and contextual customer experience's, or using telemetry or IoT technology to monitor device data and trigger service or maintenance responses based on Service Level Agreements (SLAs) and factors such as skills or proximity of field technicians.

These types of capabilities outflank competitors and realize new competitive advantages for the company. To achieve strategic or transformational change, these capabilities should be allocated more of the limited technology investment than components in the prior layers.

PACE CRM Strategy

See the PACE IT application strategy that aligns the methods business leaders use to create competitive advantages with technology that empowers those advantages.

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A single business application may cross all three layers. For example, a CRM system is generally a System of Record, but a CRM Next Best Offer (NBO) algorithm or a self-service knowledgebase may be Systems of Differentiation. Using IoT technology to trigger predictive maintenance responses may be a system of innovation.

Different companies may classify the same application capability differently, and the same capability may change layers due to maturity or obsolescence. Also, a System of Record is required to support more nimble Systems of Differentiation and Innovation.

The benefit of the PACE IT application strategy model is that it allocates more investment to the specific apps or capabilities that drive the most business value and less investment toward technologies or capabilities that are table stakes or don't deliver competitive business advantages.