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The Transforming Power of Complementary Assets

July 1, 2006 | Alan Hughes , Michael S. Scott Morton | Managing Technology
Successful companies recognize that information technology can fundamentally alter the very nature of work. Such a transformation, however, often requires that an organization rethink its corporate strategy and remake its basic structure and processes. The authors, drawing on interviews with Schneider International as part of MIT's Management in the 1990s Research Program, show that the benefits to organizations are related to the extent that organizations adapt their internal structures, processes and culture to extract the greatest value from technology. Although IT has enabled the growth of new companies and even entire industries, these technologies have also transformed the opportunities and challenges facing established manufacturing and service firms. This article examines Schneider's implementation of technologies such as GPS and satellite tracking not only to improve dispatch but also to provide value to customer service such as pinpointing delivery times, driver availability and the ability to alter delivery pickup and drop-off locations.

The authors demonstrate that if organizations invest in complementary assets (people skills, new organizational structures and new work processes) to support their IT, they can transform services into products that will evolve into yet more new services, creating a virtual spiral with enormous competitive advantages.
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