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.