“Informatio Technology Can’t Really Give a Company a Strategic Advantage, Because Most Competitive Advantages Don’t Last More Then a Few Years and Soon Become Strategic Necessities Which Just Raise the Stakes of the Game. Discuss Why?

Topics: Strategic management, Value chain, Michael Porter Pages: 18 (4492 words) Published: December 23, 2008
EXECUTIVE SUMMARY

Since introduction of computer in 1950 to organizations, information technology has been deploying to gain competitive advantage for business organization. According to Ward and Griffiths, (1996), that information technology (IT) has gone through three evolutions. Today is third era of IT, organization view IT to support existing business strategy, create new opportunities for business, competitive advantage and new strategy opportunities leads to new markets and products and survival in this quick and challenge environment. The affects of IT felt across entire organization such as accounting software for Accounting process, Customer Relationship Management (CRM) system to understand customers needs and wants, SAP solutions for supply chain model linking process of purchasing, manufacturing, logistics and order-fulfilment activities and deliveries. With the rapid change in the IT environment, planning is essential. Therefore, today organization leaders need to develop strong understanding of IT as transformation agent and value contributor.

On the other hand, there is another school of thought, for example, Nicolas G Carr commented in “IT Doesn’t Matters” that IT already vanishing it advantage because another company can easily copy any advantages obtained by one company and further, it is affordable. Hence, IT has becomes commodity based on internet standard whereby is easily available; it is no longer differentiating factor in organization performance. He viewed that no companies could use IT to obtain the strategic advantage over its rivals any more than it could with electricity, telephone or any infrastructure. In conclusion of Carr “IT Doesn’t Matter” that company should reduce IT spending, be a follower to reduce risk of computer outages and privacy and security breaches and avoid deploying IT in new ways.

This paper will divide into two portion of the impact of IT in business organization. First section covers two topics that are gaining competitive advantage in IT and sustaining competitive advantage. In Gaining Competitive Advantage in IT, this topic will described Michael Porter five competitive forces strategic system and illustrated methodology of a company uses IT to thwart some of these forces, for example, cost leadership and differentiation in generic strategies. The other element by Porter cover here is business value chain model. Its will described five functions individually of value chain on how IT supports those function that create business value. Second topic of this section, describe how companies sustaining competitive advantage by applying strategic alliances concept.

In second section, it covers topic of IT Don’t Last Long and IT Becomes Strategic Necessities. In IT Don’t Last Long topic, this paper will describe why IT have lost it competitive advantage and has becomes commodities using Nicholas G. Carr theories and its also explain why company finds keeping proprietary technologies a secret is very difficult with comments from Clemons & Knez, and Lieberman & Montgomery. As for second topic of this section, it explain why IT has becomes necessities and brief explanation on why companies still invest in IT even-thou its only give strategic necessities.

TABLE OF CONTENTS Page No.

EXECUTIVE SUMMARY

1-2

1.0
INTRODUCTION

4
SECTION I

2.0
GAINING COMPETITIVE ADVANTAGE IN INFORMATION TECHNOLOGY
2.1Porter’s Five Competitive Forces Model
Porter’s Generic Strategies
a.Cost Leadership Strategy
b.Differentiation Strategy

2.2Business Value Chain Model
2.2.1Porter’s Value Chain Model

5-11

5-7

8-11

3.0
SUSTAINING COMPETITIVE ADVANTAGE

11-12
SECTION II

4.0
INFORMATION TECHNOLOGY DON’T...

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