IT Corporate Strategy for Competitive Advantage

IT bodily Strategy for Competitive re kinksIT Strategy The Corporate Strategy for Competitive Advantage?The last fewer decades take a shit seen a tremendous advance in the field of selective information applied science. The rise of internet and the developments in the field of information engineering science put on had a great impact on cable. New methods of communications and managing business operations induce changed the face of business. This increase use of applied science resulted in an awareness of the unavoidableness for technology strategies, and many an pertly(prenominal)(prenominal) companies soon realised that a coherent IT outline was required in order to put technology to good use. There is now widespread awareness of the strategical grandeur of information technology.Bakos and Treacy (1986) doted out that the opportunities arising from information technology are threefold alter efficiency and effectiveness of the arrangement, out-manoeuvring oth er participants in the industry, and the usefulness an outsider crumb give themselves when trying to enter the industry. They further point out that these opportunities dally three major(ip) strategic views of corporate dodging internal scheme, competitory dodge and business portfolio strategy. Evan and Wurster (2000) present that the sunrise(prenominal) economics of information blows traditional business structures to bits and the pieces of will then recombine into freshly business structures. What this translates to is that, the varied possibilities offered by information technology breaks up traditional reach and hang on chain structures an ever widening tar write down market can be reached using the natural technologies, and the economics of supply and deli genuinely is broken with the new technological methods of deli truly. Once example of this is the newspaper business. The delivery of online news reaches a much wider audience, while the economics of traditional newspaper delivery is lost. another(prenominal) side effect of the increased reach offered by information technology is that the need for intermediaries is greatly reduced. The newspaper business will probably need fewer outlets to physically sell their newspapers. The economics of using intermediaries also changes substantially. another(prenominal) industry that has experienced a revolution caused by information technology is the travel industry. Package holiday travel agents on the high street hire faced severe competition from competitors who have used technology to gain great competitive advantage there are many business selling airline tickets, hotel bookings, etc. online the companies that do business online have great advantages in various areas such as reach, cost of conducting business, the advantages provided by instant updates for both the business and customers, etc.Johnson et al (2005) in event regard technological changes as adept of the change elements of the (bu siness) environment. Environmental digest is usually done using PESTLE analysis, scenario analysis, SWOT analysis, etc. compendium of technological change is one of the pillars of PESTLE analysis. Johnson et al (2005) further point out that the SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis for LINK, the network of UK ATMs, revealed that the threat it would face was from a competitor with the capability to develop more advanced technologies to capture the future market. This is in fact an example of the strategic gap the gap in the midst of the capabilities of an arrangement and the major environmental factors of change. The extent to which an organisation keeps up with the state of the art developments in its field oftentimes creates a strategic gap. The strategic gap is important because it measures the gap in the midst of the now, the organisations current position, and the desired, the organisations desired position.Globalisation, that phenomenon of increa sed integration of markets some the world, is often attri justed to free trade and economic treaties in the midst of most countries of the world however, information technology has also been a major enabling factor in globalisation. New technologies have allowed instant communication, the move out and dissemination of information to wider audiences and to audiences that have been otherwise out of reach, and correspondingly, have resulted in wider markets with reduced be and greater reach. Thus technology has facilitated the creation of global networks, which has lead to the term weightless economy and virtual enterprise cosmos applied to modern business (Dransfield, 2001, Lefebvre and Lefebvre, 1998).The dot-com boom and bust has now subsided, and businesses do understand that technology is not the magic wand to success, but is a powerful tool that can contribute great advantages. The advantages offered by the cyberspace simply cannot be ignored. It is also widely accepted t hat the execution of instrument and use of technology requires a coherent IT strategy. Many large organisations straight off have the specific top executive post of Chief learning Officer, who is responsible for developing the IT strategy. Hagel and brownish (2001) point out that old IT caution assumptions will be overturned by the stream of new Internet based services that offer great cost savings and new opportunities for collaboration. Old ERP (enterprise resource planning) systems have solved some problems, but have created new ones, especially because they are very restrictive. The Internet on the other hand, has a very defining characteristic of being open and flexile it is based on open standards, has email and web servers distributed all around the globe, and anyone can easily set up servers that offer web services. Hagel and Brown further say that businesses should effect a transition to a new IT strategy based on Web-based services. They recommend a strategy that bu ilds on the caller-outs existing systems, starting with the peripheral operations, and the use of common platforms for collaborations. They predict that the wee use of Web services focused on reducing costs will be followed by its use for efficiency.The development of a new IT strategy however, has to be in alignment with the business strategy. Louis et al (1998) bring a strategic alignment perspective to the study of successful solicitude of information technology and stress the need for internal consistency between IT strategy and business strategy. They define four types of alignment between IT strategy and business strategy work- strategy-led, Conservative, Organization-led and Technology-led. Plant (2000) identifies one key issue of strategy execution that is often overlooked by an organisation content ownership. He states that content may be king, but the best content often comes from an acknowledgement that it is the total environment within the organisation that contr ibutes and supports to the development of that content. This in fact can be said to be the cornerstone of the strategy for steering of information. Plant also rightly points out that e-commerce organisations require a much more adaptive structure than traditional command and enclose structures. He suggests that the formulation of Internet strategies must vary according to whether the organisation was born on the Internet, has been established and is now moving to the Internet, or forming new collaborations on the Internet, and describes in detail the process each type of organisation can adopt to formulate their Internet strategies.Dell Computers is a association that has leveraged on the Internet and created a business model that has given itself a very powerful competitive advantage over its competitors. It is a very good example of a company that has formulated a very good business strategy that uses the Internet to specifically gain advantage over its competitors. Michael Del l, who set up Dell Computers famously said that recover of the Internet as a weapon there on the table. either you pick it up or your competitor doesbut somebody is going to get killed. (Burrows, 1999). Arora et al explain that the presence of markets for technology conditions the IT strategy as well as the corporate strategy of companies. The markets for technology increase the strategy space, as companies have a choice about the use of technology. This in turn has implications for the management to formulate a strategy for more proactive management of technology. They further point out that at the industry level, markets for technology may lower barriers to entry and increase competition, which has important implications for the companys broader strategy as well.As society evolves and becomes more technology dependant, businesses have to evolve correspondingly too. It is no longer sufficient to simply be the best change happens, and companies have to adapt to this change in or der to maintain their position. Technology is one of the biggest factors of this change and this makes it very important that corporate business strategy and IT strategy of a company are in alignment for a company to succeed.ReferencesArora, A., Fosfuri, A. and Gambardella, A. (2001) Markets for Technology and their Implications for Corporate Strategy Industrial and Corporate Change, Vol 10, Number 2, pp. 419-451 Oxford University instancyBakos, J.Y., Treacy, M.E. (1986) education Technology and Corporate Strategy A Research status MIS Quaterly Vol. 10, No.2, p.107Burrows, P. (1999) Michael S. Dell BusinessWeek Online, September 27, 1999 Issue (Available online at http//www.businessweek.com/1999/99_39/b3648052.htm last accessed May 2007)Dransfield, R. (2001) Corporate Strategy Harcourt HeinemanEvan P Wurster T (2000) Blown to Bits, How the New Economics of culture Transforms Strategy Boston, Mass. Harvard Business School / London McGraw-Hill.Hagel, J. and Brown, J.S. (2001) Y our Next IT Strategy Harvard Business Review Oct 2001, pp. 105 113.Hee-Dong Y., Mason, R.M. (1998) The Internet, value chain visibility and learning minutes of the Thirty-First hullo International Conference on System Sciences, 1998. Vol. 6 pp. 23-32Johnson, G. and Scholes, K., Whittington, R. (2005) Exploring Corporate Strategies Harlow Prentice-Hall, 7th EditionMa, L.C.K., Burn, J.M., Galliers, R.D., Powell, P. (1998) Successful management of information technology a strategic alignment perspective Proceedings of the Thirty-First Hawaii International Conference on System Sciences, 1998. Vol. 6 pp. 13-14Boddy, D, Boonstra, A. and Kennedy G. (2005) Managing Information systems An Organisational sight Harlow Financial Times/Prentice Hall. 2nd EditionLaudon C. and Laudon, J.P. (2006) Management Information Systems Upper Saddle River, NJ Pearson/Prentice Hall, 9th Edition