• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Information Technology has been heralded, by many, as the greatest invention after the wheel.

Extracts from this document...

Introduction

Information Technology has been heralded, by many, as the greatest invention after the wheel. While scanning contemporary literature, it becomes quite impossible to find anything that goes contrary to what is said above. There are some who temper their predictions by mouthing a few warnings against improper usage etc. there are very rare instances when somebody has raised his / her voice against the prevailing wind. At this juncture we need to examine the fact that though IT has pervaded our life in a way unimaginable a few decades back, is it sufficient to get us competitive advantage in today's dynamic and fast-moving marketplace. Organisations have to proverbially run to keep pace with the requirements of their stakeholders. At this juncture, we need to re-examine if IT is the end-all be-all? Is it the panacea to falling sales?? Traditional view of IT First let us examine what can give us competitive advantage?? Michael Porter's five forces model is given below. Buyers Buyers in an industry are strong if they make volume purchases or are made up of large, concentrated consumer groups. If there are only a few buyers for several not well-differentiated suppliers, the buyers can be very powerful relative to the suppliers. One method for firms to defend against powerful buyers is by building switching costs into their product or service. Forward integration is a more subtle form of establishing switching costs. The McKesson Drug Company, through its ECONOMOST ordering system, made it possible for pharmacists to order supplies over hand-held terminals that read shelf lists. ...read more.

Middle

Studies of corporate IT spending consistently show that greater expenditures rarely translate into superior financial results. The key to success, for the vast majority of companies, is no longer to seek advantage aggressively but to manage costs and risks meticulously. The challenge will be to maintain that discipline when the business cycle strengthens and the chorus of hype about IT's strategic value rises anew. The Path of Development of Strategic Information Systems Theory ---Roger Clarke http://www.anu.edu.au/people/Roger.Clarke/SOS/StratISTh.html Clarke starts with an brief of the role of information system down the years. He then examines Porter's strategic theory and the five key forces. The two basic strategies that enterprises can adopt are a> low cost b> product differentiation He talks about the second mover advantage phenomenon, where the first user actually incurs a disadvantage. He also draws a distinction between sustainable and contestable competitive advantages. An analysis of the prevalence of the use of the terms 'comparative advantage' and 'competitive advantage' as though they were equivalent and interchangeable. He postulates that innovation in IT is of strategic advantage only if compatible with, and preferable leverages upon the company's existing characteristic and advantage. STRUCTURAL DIFFERENCES AMONG FIRMS: A POTENTIAL SOURCE OF COMPETITIVE ADVANTAGE IN THE APPLICATION OF INFORMATION TECHNOLOGY by Eric K. Clemons & Michael Row (1987) In this article they see Information systems as strategic business tools, frequently essential to a firm and central to its competitive strategy. Their importance is now acknowledged. ...read more.

Conclusion

And at the end of the day what is a PC most used for - playing games, watching movies and net surfing. It leads to wastage of time of self and others, the repeated headache of trying to make systems work. Thomas Haigh is correct about many aspects. Essentially IT has become a general purpose technology much like electricity has become today and hence can not contribute to a significant and sustainable competitive advantage. Issues in the Application of Information Technology for Strategic, Competitive Advantage by Virginia Franke Kleist (http://www.be.wvu.edu/divmim/mgmt/kleist/) Kleist starts with the productivity paradox. He then talks of tangible vs. intangible benefits from IT. The benefits from It are more intangible than tangible. So how do we measure it effectively and truly?? Also IT doesn't help an organization be unique rather what it helps is in staying even with competition. Thepercieved value additions that IT industry flouts were actually from simple automation projects. In contrast, value from highly risky, but strategic IT projects has yet to be realized effectively. Hence the risk vs. return analysis should not allow IT spends to so astronomical. Conclusion After review of the above articles our group is of the view that * Strategic or competitive advantage can only be obtained by a company's vision and process and IT can only be a facilitator. * Greater spending on IT does not translate into superior financial results. * The smartest users of technology - here again, Dell and Wal-Mart stand out - stay well back from the cutting edge, waiting to make purchases until standards and best practices solidify. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level ICT in Business section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level ICT in Business essays

  1. UNIT4: PRESENTING BUSINESS INFORMATION

    This kind of activity leaves an image of Tesco as caring to the needy those winning more customers and customer loyalty. Sponsoring age cancer targets to cancer patients and other new potential of showing how the organisation cares about the suffering ones.

  2. I have selected a nursery because there is high demand in the UK as ...

    production life cycle are: > Introduction Stage > Growth Stage > Maturity Stage > Decline Stage Introduction The introduction stage is when a product is newly introduced to the market and wants potential customers to hear about it. It tries to raise awareness by focusing mainly on the four P's (Product, Pricing, Distribution, Promotion).

  1. The purpose of this document is to define the Context of Cain Motors Information ...

    see a difference in the time it takes to search the database for information and find that the information they receive is in fact no longer valid. Systems Impact: This change will require the production of a new updated version of the Cain motors database.

  2. Effects of Information Technology on Business

    They will be able to see each other and both understand what is wrong with the patient. Also telemedicine are being installed on some ambulances so if a patient needs surgery right then in the ambulance, a doctor will have these pictures transmitted and he can figure out what he should do.

  1. Apple Incorporation - Case Analysis

    Apple not only contends with the physical distribution of its computers but it must also address distribution of its music and iTunes software products. The AirPort Express system is one of Apple's new methods of staying on top of the distribution of its innovations.

  2. Competitive advantage analysis in the Grocery retailing industry - The role of IT and ...

    Overview: Supermarkets sweep up (n.d.) said that for the first time in years, in Jan 2002, Sainsbury outperformed Tesco over the Christmas period. Tesco needs to act immediately if it wishes to retain its position. Below are recent technologies that Tesco might adopt to help them keep their current customers and attract new ones.

  1. Analysis of the Information Systems of a fast moving consumer goods company and the ...

    It is a relatively simple and practical system. The Chair stressed the fact that the key issue is for managers to understand the real drivers of the company and to be aware of changes to these drivers. He said that it is important to evaluate IS opportunities in relation to

  2. The Use of Geographical Information Systems (GIS) And International Technology Transfer by Non-Governmental ...

    DEVELOPMENT: "To expand or realise the potential of; bring gradually to a fuller, greater or better state"(New college edition of American Heritage Dictionary) DEVELOPMENT: According to Ingham (1995) "Development is a much broader concept of human welfare, with important social, political and cultural implications."

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work