Strategic Use of Information Technology To Achieve Competitive Advantage

For this assignment you will have to prepare a paper that critically discusses how organisations apply the strategic use of IS/IT to achieve competitive advantage. Some aspects and issues you may discuss in your paper could include (but are not limited to):

• Discuss at least one (1) successful and one (1) unsuccessful examples of the use of IS/IT for gaining or enhancing competitive advantages.
• Highlight some success factors for the successful example.
• What are some lessons learned (i.e., what went wrong?) for your unsuccessful example
• Suggest some internal (e.g., organizational, individual, and management factors) and external factors (e.g., market, industry, social, economic, technological and political/policy factors) influencing the success or failure of organisations' attempts at gaining and enhancing competitive advantages? Are internal factors more important than external factors? Or the other way around?

Introduction

Companies comprise of a set of business functions. Information Systems/ Information Technology (IS/IT) is used to improve the total productivity and performance of business functions through building on synergies and core competencies (Gu & Jung 2013). In terms of synergy, the functional output is used as inputs through industry and market expertise which further assist in lowering costs and generating profits. Organisational competency makes a company gain leadership in its industry which relies on the experience and expertise gained over the years of operations (Martinette et al. 2014). Implementation of an information system assists a company in managing information and process flow across departments and improves competency level.

Having a competitive advantage over other companies is critical for the success of any organisation. Competitive advantage is the value that a company's product or service has earned when compared to its competitors' similar offerings (Porter & Heppelmann 2014). Competitive advantage is temporary in nature, and companies have to develop measures to sustain it over the long term. Companies that have a competitive advantage over others have well-developed capabilities with access to special resources and efficient utilisation, which results in the revenue generation, profits, and improved productivity. Over the long run, such companies are highly valued than their competitors (O’Brien & Marakas 2011).

In order to survive in the competitive market, environment companies have to develop and implement strategies as a countermeasure against the five competitive forces. These competitive strategies include competitive pricing through cost management, product or service differentiation, innovation, business growth, and entering strategic alliances (Porter & Heppelmann 2014). Implementation of information systems is considered as a critical enabler for these strategies.  

This report describes how organisation use IS/IT as a strategy to enhance their competitive advantage through examples of successful and unsuccessful implementations. The success factors and lessons learnt from failures are explained. Further, internal and external factors that influence an organisation’s effort to attain competitive advantage and its measures to sustain a competitive advantage with the implementation of IS/IT are discussed.

1. Implementation of IS/IT in Organisations

Information System/Information Technology acts as a key supporting platform for companies to strengthen their competitiveness. It serves the role of a component that manages knowledge, enterprise-wide business process management systems, customer intelligence and act as a change agent which transforms and re-engineers the entire business functions of an organisation (Braglia & Frosolini 2014). The IS/IT implementation in an organisation requires the involvement of various resources and is complex and exhaustive.

The implementation of IS/IT is categorised into three stages which include pre-implementation when planning, goals, standards are developed; implementation when the actual placement of IS/IT in operations occur and post-implementation where service and training are organised to assist employees in familiarising the introduction and use of technology (Dorantes et al. 2013). Despite the best efforts of companies, experts have noted that over 70% of all change management initiatives are highly likely to fail (Leonard & Coltea 2013). It is important for companies and their management to give due recognition that the introduction of IS/IT to the business processes require organisational changes (O’Brien & Marakas 2011). This requires a proper change management plan, and any mismanagement would result in conflicts arising from the integration of the new system with the existing legacy systems, employees and business processes.