Information technology can’t really give a company a strategic advantage, because most competitive advantages don’t last more than a few years and soon become strategic necessities that just raise the stakes of the game. Discuss.

Ans.

Information technology for early innovators certainly can give a company a competitive advantage. Although technology is changing at a rapid pace, the first company to gain acceptance stand to capture a substantial market share before the competitors can catch up. By the time that other organizations catch up, the originator has potentially realized a large market share, and captured substantial customer loyalty.

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-fulfillment 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.

In Gaining Competitive Advantage in IT, described in 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. It will describe five functions individually of value chain on how IT supports those function that create business value.

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