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How to Create a Competitive Advantage Through Software Development

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How to Create a Competitive Advantage Through Software Development


Companies have been doing an increasingly good job of ensuring their software investments enhance their competitive advantages. Most businesses have moved past the “we need an app” stage. However, many leaders are still grabbing at the next big thing. For instance, you might hear, “We need blockchain,” or “Do we have machine learning capabilities?”

If innovation is a differentiator for your business, it’s obviously okay to experiment with different software solutions to accentuate your competitive advantage. However, for most, leading with technology is more akin to putting the cart before the horse.

You can’t use every emerging technology, nor should you. In fact, technology consultant Jeffrey Funk found that many recent artificial intelligence solutions aren’t as valuable as the hype suggests. If you want to enable the best facets of your operations and increase your business’s value, you need to focus your software development initiatives on impactful targets.

Finding the Real Differentiator

Trying to determine whether your competitive advantage is visible in your software investments? To start, you need to be explicit about your competitive advantage. Do you have it written down? Is that what’s expressed in reality? Would your customers agree?

Even though you might see yourself as an innovator in one area, it doesn’t matter if your customers disagree. 

To them, you may be nothing more than a scale player with high switching costs. In that case, you either need to align your vision with reality or take the necessary steps to change perceptions.

Understanding Users’ Perceptions

Data can certainly help you understand where opinions fall. Software provides numerous data points that aren’t readily available in other business-enabling tools, so it behooves you to use them to evaluate whether your competitive advantages are coming through. For example, is customer service the differentiator? Does that resonate when you look at your self-service and support stats? What about network effects? How many hooks to other systems do you see per client?

Similarly, you can use some qualitative points to help determine whether your end-users feel the way you’d expect. It’s worth checking consumer sites and message boards relevant to your business to check sentiment around customer experience and service. Notwithstanding a few outliers, is it in line with your expectations? Once you understand your true strengths, you can explore technology initiatives that boost your competitive advantages.

Leveraging Software Development

Software development isn’t something to take lightly; it comes at a significant investment. However, it can offer many benefits to your business. With that in mind, here are a few tactics to ensure your software enables operations and increases your company’s value:

1. Build on Your Strengths.

Competitive advantages shrink over time due to the nature of the marketplace. As they pay off for you and boost your position, rivals will imitate you. All is not lost, however. One way to retain your advantage is to continue innovating on your core strengths. Internal- and external-facing software is the key to improving your value.

Remember that software development doesn’t happen overnight or all at once, so you’ll need to be selective when investing in technology.

Companies using technology to gain a competitive advantage often focus on a specific business area, such as customer relations or human resources, that they feel separates them from their peers. For instance, customer relationship management systems help centralize communications and provide the opportunity to gather customer knowledge. You can use these insights for segmentation purposes, then start delivering more personalized experiences.

Alternatively, you could consider investing in technology for HR. Software for this department can offer insights into your available staff, which improves the employee experience and supports retention efforts. Once you understand your core strengths, you can pick an area to support with a software solution.

2. Facilitate Customer Interactions.

Customers are increasingly seeking digital avenues to interact with your business. Should individuals experience issues or raise concerns, they’ll expect prompt responses. But not from chatbots and phone menus alone. If the problem is too complex for automation to handle, people want to connect seamlessly with real workers who can offer personalized assistance. Leaving this area of operations exclusively to digital touchpoints does nothing to further your customer engagement strategy.

Customer engagement software helps facilitate and centralize communications with customers. These solutions employ a variety of channels and touchpoints to enable customer interactions and provide a relevant end-to-end experience. With that solution in place, it becomes much easier to deploy conversational marketing, build a relatable social media presence, and deliver personalized messaging to your target audience.

If you’re still uncertain what your audience wants and needs, look to customer data.

You may also want to go directly to the source and seek feedback with surveys or questionnaires. For example, ask what customers think of your products and service offerings and uncover any friction points they might be experiencing.

3. Pay Attention to How Employees Use Tools.

Though this should go without saying, your employees anticipate digital tools to enhance their productivity and make their day-to-day responsibilities easier. If you don’t invest in technologies that enable your tasks, the lack of support becomes a workplace detractor. Sadly, many companies appear to be floundering on this front, particularly with communication tools. According to a Slack study, only 31% of workers say they are “extremely satisfied” with what’s available to them. More importantly, 71% expect more tools in the future.

To avoid a similar problem, plot out your current advantages. Then, follow up with a technology strategy that expands those advantages into the future. If you’re going the software development route, consider the user experience as well.

Workflow software should always meet the needs of your team, not just check an arbitrary box for operations.

Otherwise, the competitive advantage will be lost, and the software solution may even go unused in favor of homegrown workarounds.

4. Don’t Reinvent the Wheel.

No one would expect you to make a new word processor. Similarly, you shouldn’t be thinking about building a new internal instant messenger, unless it’s embedded in a suite of other tools and meets people where they work.

Be smart about what you can buy now versus build later.

Look at what you can configure with off-the-shelf commercial solutions to meet your business needs. Off-the-shelf software may be less agile, but it can be a short-term solution for today’s issues. Should your needs change, you can explore custom software opportunities.

The world is increasingly digital, but you shouldn’t invest in technology for technology’s sake. Instead, you should pursue software development initiatives that bolster your competitive advantage.

Image Credit: by Luke Peters; Unsplash; Thank you.

Alex Tapper

Head of Client Strategy and Services

Alex Tapper is the head of innovation at Frogslayer, a custom software development and digital innovation firm. Clients partner with Frogslayer to rapidly build, launch, and scale forward-leaping, industry-shattering software products and digital platforms that create new revenue streams and sources of competitive advantage.

Politics

Fintech Kennek raises $12.5M seed round to digitize lending

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Google eyed for $2 billion Anthropic deal after major Amazon play


London-based fintech startup Kennek has raised $12.5 million in seed funding to expand its lending operating system.

According to an Oct. 10 tech.eu report, the round was led by HV Capital and included participation from Dutch Founders Fund, AlbionVC, FFVC, Plug & Play Ventures, and Syndicate One. Kennek offers software-as-a-service tools to help non-bank lenders streamline their operations using open banking, open finance, and payments.

The platform aims to automate time-consuming manual tasks and consolidate fragmented data to simplify lending. Xavier De Pauw, founder of Kennek said:

“Until kennek, lenders had to devote countless hours to menial operational tasks and deal with jumbled and hard-coded data – which makes every other part of lending a headache. As former lenders ourselves, we lived and breathed these frustrations, and built kennek to make them a thing of the past.”

The company said the latest funding round was oversubscribed and closed quickly despite the challenging fundraising environment. The new capital will be used to expand Kennek’s engineering team and strengthen its market position in the UK while exploring expansion into other European markets. Barbod Namini, Partner at lead investor HV Capital, commented on the investment:

“Kennek has developed an ambitious and genuinely unique proposition which we think can be the foundation of the entire alternative lending space. […] It is a complicated market and a solution that brings together all information and stakeholders onto a single platform is highly compelling for both lenders & the ecosystem as a whole.”

The fintech lending space has grown rapidly in recent years, but many lenders still rely on legacy systems and manual processes that limit efficiency and scalability. Kennek aims to leverage open banking and data integration to provide lenders with a more streamlined, automated lending experience.

The seed funding will allow the London-based startup to continue developing its platform and expanding its team to meet demand from non-bank lenders looking to digitize operations. Kennek’s focus on the UK and Europe also comes amid rising adoption of open banking and open finance in the regions.

Featured Image Credit: Photo from Kennek.io; Thank you!

Radek Zielinski

Radek Zielinski is an experienced technology and financial journalist with a passion for cybersecurity and futurology.

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Politics

Fortune 500’s race for generative AI breakthroughs

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Deanna Ritchie


As excitement around generative AI grows, Fortune 500 companies, including Goldman Sachs, are carefully examining the possible applications of this technology. A recent survey of U.S. executives indicated that 60% believe generative AI will substantially impact their businesses in the long term. However, they anticipate a one to two-year timeframe before implementing their initial solutions. This optimism stems from the potential of generative AI to revolutionize various aspects of businesses, from enhancing customer experiences to optimizing internal processes. In the short term, companies will likely focus on pilot projects and experimentation, gradually integrating generative AI into their operations as they witness its positive influence on efficiency and profitability.

Goldman Sachs’ Cautious Approach to Implementing Generative AI

In a recent interview, Goldman Sachs CIO Marco Argenti revealed that the firm has not yet implemented any generative AI use cases. Instead, the company focuses on experimentation and setting high standards before adopting the technology. Argenti recognized the desire for outcomes in areas like developer and operational efficiency but emphasized ensuring precision before putting experimental AI use cases into production.

According to Argenti, striking the right balance between driving innovation and maintaining accuracy is crucial for successfully integrating generative AI within the firm. Goldman Sachs intends to continue exploring this emerging technology’s potential benefits and applications while diligently assessing risks to ensure it meets the company’s stringent quality standards.

One possible application for Goldman Sachs is in software development, where the company has observed a 20-40% productivity increase during its trials. The goal is for 1,000 developers to utilize generative AI tools by year’s end. However, Argenti emphasized that a well-defined expectation of return on investment is necessary before fully integrating generative AI into production.

To achieve this, the company plans to implement a systematic and strategic approach to adopting generative AI, ensuring that it complements and enhances the skills of its developers. Additionally, Goldman Sachs intends to evaluate the long-term impact of generative AI on their software development processes and the overall quality of the applications being developed.

Goldman Sachs’ approach to AI implementation goes beyond merely executing models. The firm has created a platform encompassing technical, legal, and compliance assessments to filter out improper content and keep track of all interactions. This comprehensive system ensures seamless integration of artificial intelligence in operations while adhering to regulatory standards and maintaining client confidentiality. Moreover, the platform continuously improves and adapts its algorithms, allowing Goldman Sachs to stay at the forefront of technology and offer its clients the most efficient and secure services.

Featured Image Credit: Photo by Google DeepMind; Pexels; Thank you!

Deanna Ritchie

Managing Editor at ReadWrite

Deanna is the Managing Editor at ReadWrite. Previously she worked as the Editor in Chief for Startup Grind and has over 20+ years of experience in content management and content development.

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Politics

UK seizes web3 opportunity simplifying crypto regulations

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Deanna Ritchie


As Web3 companies increasingly consider leaving the United States due to regulatory ambiguity, the United Kingdom must simplify its cryptocurrency regulations to attract these businesses. The conservative think tank Policy Exchange recently released a report detailing ten suggestions for improving Web3 regulation in the country. Among the recommendations are reducing liability for token holders in decentralized autonomous organizations (DAOs) and encouraging the Financial Conduct Authority (FCA) to adopt alternative Know Your Customer (KYC) methodologies, such as digital identities and blockchain analytics tools. These suggestions aim to position the UK as a hub for Web3 innovation and attract blockchain-based businesses looking for a more conducive regulatory environment.

Streamlining Cryptocurrency Regulations for Innovation

To make it easier for emerging Web3 companies to navigate existing legal frameworks and contribute to the UK’s digital economy growth, the government must streamline cryptocurrency regulations and adopt forward-looking approaches. By making the regulatory landscape clear and straightforward, the UK can create an environment that fosters innovation, growth, and competitiveness in the global fintech industry.

The Policy Exchange report also recommends not weakening self-hosted wallets or treating proof-of-stake (PoS) services as financial services. This approach aims to protect the fundamental principles of decentralization and user autonomy while strongly emphasizing security and regulatory compliance. By doing so, the UK can nurture an environment that encourages innovation and the continued growth of blockchain technology.

Despite recent strict measures by UK authorities, such as His Majesty’s Treasury and the FCA, toward the digital assets sector, the proposed changes in the Policy Exchange report strive to make the UK a more attractive location for Web3 enterprises. By adopting these suggestions, the UK can demonstrate its commitment to fostering innovation in the rapidly evolving blockchain and cryptocurrency industries while ensuring a robust and transparent regulatory environment.

The ongoing uncertainty surrounding cryptocurrency regulations in various countries has prompted Web3 companies to explore alternative jurisdictions with more precise legal frameworks. As the United States grapples with regulatory ambiguity, the United Kingdom can position itself as a hub for Web3 innovation by simplifying and streamlining its cryptocurrency regulations.

Featured Image Credit: Photo by Jonathan Borba; Pexels; Thank you!

Deanna Ritchie

Managing Editor at ReadWrite

Deanna is the Managing Editor at ReadWrite. Previously she worked as the Editor in Chief for Startup Grind and has over 20+ years of experience in content management and content development.

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