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Employ Alternative Technologies That Offer Cost Advantages for the Entire Business System

Jul 24, 2008
How broadly are you looking for cost reductions through new technology applications?

Benefits from an existing technology often run out after a while. If you needed more letters typed on electric typewriters, you couldn't get much more speed past what a fast, accurate typist could do until the electronic typewriters with some memory were invented. Then, you could reuse parts of letters and merge lists with customized letters, while employing less talented typists. Now, a personal computer you use yourself can launch hundreds of millions of customized e-mails in the blink of an eye.
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You can gain greater cost advantages when you review the current state of the art and reconfigure it into more effective system solutions from the perspectives of the customers and those who are serviced by customers. Technology advances can play a role in this process of creating improved business models, as well.

Often the potential to grasp the benefits of such advances is limited by a narrow focus on how the particular performance of a certain technology compares to the existing alternatives. Such comparisons are flawed for many reasons:

First, the current performance of a new technology will often be vastly different from its potential performance.

Second, many technologies can substitute for one another. As a result, a technology with lower performance may still win in the market place if its costs are low enough.

Third, the performance that ultimately counts is the one that makes the end user more productive. Achieving that result can sometimes mean higher costs for the producer. As a result, the technologists are often in the worst position to consider the cost reduction potential of their technologies. Those who look at applications from the end user's perspective usually see the best perspective on the opportunity.

QLogic is a company that understands the significance of the end-user's costs. As a result, the company's first priority is to locate technologies that could potentially reduce the costs of using mass computer data storage. The company's products enable the communication with such storage from individual computers.

Over time, the company has migrated from providing components to delivering bundles of technology as solutions to end-user needs. In testing out the potential of such technologies, QLogic considers not only end-use effectiveness but also how the technologies will affect time-to-market for the intermediary suppliers to the end users. That exceptional ability to evaluate and master new technologies has driven the company to enjoy unusually rapid growth in quadrupling its revenues between 1997 and 2000 before the storage industry "bust" of 2001-2002 arrived.
About the Author
Donald Mitchell is an author of seven books including Adventures of an Optimist, The 2,000 Percent Squared Solution, The 2,000 Percent Solution, The 2,000 Percent Solution Workbook, The Irresistible Growth Enterprise, and The Ultimate Competitive Advantage. Read about creating breakthroughs through 2,000 percent solutions and receive tips by e-mail by registering for free at

http://www.2000percentsolution.com .
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