The technology is just one component in competitive strategy and that the way in which it is used and embedded in an organisation’s processes and strategies are what gives companies a competitive advantage. Amazon.com gained a sustainable competitive
advantage against its competitors. However, its advantage is multi-dimensional. It is a global brand with a broad product range and high market share. It established good relationships with customers and suppliers. It enhanced its operations and built superior supply chain management, customer relationships management and technical support. It possesses a great deal of implementation knowledge and experience. Therefore, it created a value chain which is very difficult to be fully understood hence it is very complex for competitors to duplicate it.

Due to the degree of uncertainty in business and the complexity of information systems, design assumptions and plans of any IS project had to be constantly reviewed. Benefits resulting from an innovative application of information technology can be more readily defended if the system exploits unique resources of the innovating company so that competitors do not fully benefit from imitation. Successful IS design and implementation requires a great deal of coordination with different groups (e.g. operations managers, IS managers, operation personnel, etc.) working effectively together in an organisation. However, this collaboration can only be achieved with common organisational values and a clear vision accepted throughout the company. Also companies must do more than simply assess the uniqueness or availability of emerging technological innovations in developing strategic IT plans. IT’s economic impact comes from incremental innovations rather than “big bang” initiatives Therefore, it is beyond doubt that, companies that mechanically insert IT into their businesses without changing their practices for exploiting the new capabilities will only destroy IT’s economic value. On the other hand, IS might sometimes push a company toward generic processes even when customized processes may be a source of competitive advantage. If a company rushes to install an enterprise system without first having a clear understanding of the business implications, the dream of integration can quickly turn into a nightmare.

Using IS to gain a sustained competitive advantage is not likely to be easy. However, companies who can successfully integrate information systems into their processes, strategies and culture can achieve a competitive advantage.

Posted by admin on Thursday, January 25th, 2007 at 11:16 pm.