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The Digital Transformation
New information technologies, such as broadband networks, mobile communications and the Internet, have well-known, but often unrealized, potential to transform businesses and industries. The key to success is knowing how and when to apply the technologies. Companies should look at 10 specific drivers to help determine their best strategy. Angela Andal-Ancion, Phillip A. Cartwright and George S. Yip uring tbe 1990s, companies bad vast amounts of funding for new information technologies, or NIT' Tbey invested millions of dollars on Web sites, sophisticated software packages, teleconferencing equipment, broadband networks, mobile communications and other digital technologies. Such investments helped them to keep abreast of competitors tbat were making similar expenditures. Today, many companies are strapped for resources, and they need to be extremely selective about the technologies they fund, deploying NIT in ways tbat are tbe most relevant to their businesses and strategic objectives, including their sales and marketing efforts.

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What kinds of companies and products can benellt most from the use of NIT? Books and airline tickets sell readily over the Internet wbereas automobiles and higb fashion clothing do not. Furtbennore, what types of business transformations do sucb investments enable? A company might, for example, use NIT to cut away layers of middlemen, such as distributors, that separate it from its customers (called classic disintermediation). Or, instead of getting rid of middlemen, it might choose to embrace them {remediation). Or it might build strategic alliances and partnerships with new and existing players in a tangle of complex relationships (network-based mediation). (See"Tbree Mediation Strategies," p. 37.) All three mediation strategies depend on various factors, such as a product's customizability and information content. By fully understanding those drivers of NIT, companies can begin to predict tbe...