It – Competitive Advantage Essay, Research Paper
Staying Ahead of the Competition
In today’s society organizations are forced to be competitive, it is becoming imperative that companies be equipped to integrate and assimilate information technology in ways that would encourage such competitiveness. With increasing competition organizations need to strive to increase the value of money and reduce costs. Now and in the future IT expenses, given its increasing roles, will assure greater significance. Thereof, it is critical that Information Systems are used effectively to increase production and stay ahead of the competition.
The ability to predict future trends in the environment, in terms of technological changes, market characteristics, and in the competition, etc… is crucial to an organizations future growth and success. Improving and facilitating communications with customers and suppliers also helps a company to manage the competition. . In order to do this, an organization must move towards business network designs. This form of technology is one of the most important functions of Information Systems, because it brings a company’s customers and suppliers under an information umbrella, through what are referred to as Strategic Information Systems. For instance, the creation of an electronic linkage between the U.S. Internal Revenue Service and tax preparation organizations. The linkage was created to enable the electronic filing of individual income tax returns, prepared by those firms. Scott Morton summarizes it best, in his book The Corporation of the 1990’s by saying, “It is merely an enabler that offers an organization the opportunity to vigorously invest in added innovations if it wishes to stay ahead of its competitors (15).”
All levels of an organization must function at a consistent and above average level, to help ensure its success. However, Information Technology has a unique impact on the competitive climate and on the degree of interrelatedness of products and services with rivals. This can lead to unusual degrees of simultaneous competition and collaboration between companies. Therefore, it is again reiterated that a company must understand that the changed nature of one’s competitive climate is important in an era of growing IT pervasiveness. In addition, the last decade has ultimately shown that as traditional economic competitors actions change, or as the economic and functionality of Information Technology change, the position of an organization relative to competitive companies will also change.
In both instances there is no technical or economic reason that can allow one company to ream the excess benefits from the use of IT for any extended length of time. Furthermore, competitive and technological forces simply do not seen to permit any one organization to enjoy a sustainable competitive advantage just from its use of Information Technology. However, it has been possible for an organization, over the last decade to capture many competitive benefits and advantages. Thus, the benefits do not flow from the mere use of IT but occur from the human, organizational and system innovations that are all a part of the companies structure. Scott Morton states that, ” IT is merely an enabler that offers an organization the opportunity to vigorously invest in added innovations if it wishes to stay ahead of its competitors.”
Development and Clarifications of Needs
In the IT era rapid change and intense competition upper management needs to make crucial, as well as quality decisions more frequently. This also is key not only to the success of an organization but its survival as well. In order to make quality decisions an organization must develop a game plan and clarify their needs.
In order for an organization to implement a new form of information technology upper management must be able to assess the company’s needs. Organizations do this by analyzing past performance and expected future trends, so that a future direction can be planned. Once these characteristics and many others are assessed then a company can develop a plan on how to increase the efficiency of there IS systems, to achieve and even surpass their goals. In addition, one goal that all organizations share is that they strive to continuously improve the quality of their products or services. Therefore, any Information Systems that are introduced into an organization must be able to enhance these objectives, directly or indirectly. Also, many factors must be considered for an organization to accurately clarify all of their needs and determine what IS will best meet their needs. These factors can include, but are not limited to: (1) Business relationships from loose/open (between a large number of organizations) to tight/closed relationships (between a limited number of organizations. (2) Technology considerations are based on connections and applications and depend on whether these are standardized (and potentially widely available) or unique and proprietary (and available to a small or controlled population). (3) Strategic options derive from the interplay of business relationships and technology considerati9ons. (4) Integration scope is the depth of penetration of the system into the internal processes of the participants in the business network. (5) Participant roles are related to the IT systems used or shared.
During the 1990s the “metabolic rate” of most organizations (the rate at which information moves and decisions are made, within an organization) began to progress at a fast pace. As we enter the 21st century, this trend continues to increase at an even more accelerated rate. This increase in an organizations “metabolic rate” is partially due to the fact that the external environment demands responsiveness and partly because of the way IT has enabled changes to be made in how work is done. Since global competitive forces do not permit a company to ignore its competition, as one firm picks up the new options the others must follow. Thus, IT is becoming increasingly a part of the business itself, part of the services provided or part of the products applied, as well as begin the foundation on which the business processed of the organization, both internal and external, depend.