FREE online courses on Information Technology - Chapter 4 IT AND CORPORATE
STRATEGY - Capitalizing on Information Technology
How does the firm take advantage of information technology
and achieve the highest-level integration of technology and strategy? There are
four steps to be followed by top management:
1.
Look for ways to incorporate technology in a product or service. Does
information processing provide an opportunity for a new approach to business?
Does the technology make it possible to differentiate a product or service from
that of the competition? Technology can help open a new market or increase an
existing market share.
2.
How can the firm use technology to connect with other firms? There is
great interest in inter-organizational systems that link two organizations
together. Your firm may be able to connect electronically to its customers so
that it is easy for them to order from you. A firm can encourage its suppliers
to provide links for placing orders. In these instances, the firms in question
are drawn more closely together, making it difficult for the competition.
3.
Look for ways to use technology to make dramatic changes in the way
the organization functions. Use information technology organization design
variables so management can structure an organization that focuses on one of the
strategic described above, for example, providing extraordinary customer
service.
4.
Integrate technology with planning. To do this, the firm needs
information about likely future technological developments. To conduct a
technology assessment, the organization must invest resources in research and
development. A small group of corporate researchers can collect information from
a number of sources to estimate technological trends. The firm can invest
selectively in university programs to keep up on research and can sponsor or
subscribe to studies conducted by consulting firms.
One of the greatest impediments to
using information technology for strategic purposes is an inability on the part
of top management to successfully manage the information systems function. IF
executives do not believe they can control information processing services, they
probably will be unwilling to rely on this technology to accomplish strategic
goals.
