In the above mentioned paragraphs we did literature analysis to understand that what is proposed in theories and scholars about the use of IT in getting competitive advantage. In this section we will practically focus on the current views as well as issues associated with the use of IT for competitive advantages.
It is interesting to note that in 1990’s this world entered in internet and information age and since then information technology is working as a useful weapon as well as routes for numerous businesses so that these can get competitive advantages. Information technology has not only effected various enterprises competitive strategies but also put a great impact on their competitive environment. Currently, the operative environment in the organisation is primarily based upon the information technology and to receive competitive advantages these enterprises make efforts to continue the pace of the development of IT, chiefly concentrate on application of IT and sustainable competitive advantages in order to remain advance in growing competitive environment (Jianhong, 2007).
Current use of IT for competitive advantage
Undoubtedly, these days competition among industries is affected by information technology in three ways:
• IT completely transfer the structure of industry and by doing this rules and regulation of the competition has changed.
• Competitive advantage is chiefly caused by it and this is done by offering organisation new methods to outperform their competitor.
• A whole new business is spawned by IT within the organisation’s well established operations.
Admittedly, the relationship between automation, scale and flexibility is changing due to information technology. It can be seen that to get automation there is no need of production on large scale. Therefore, in most of the industries the barrier to entry is decreasing. Simultaneously, automation is not mandatory to achieve inflexibility. This can be illustrate by giving example. The Eric locomotive facility is rebuilt on a large scale by General Electric however, designs and manufacturing data is still stored on computers by factory flexibly. One can fit approximately ten kinds of motor frames without doing manual adjustment to the machines. On normal assembly line BMW could make customizes cars just after installation of a smart manufacturing system. So Flexibility and automation can transfer the way of competition among competitors and these can be attained at the same time (Konsynski et.al, 1985)
To enhance the structure of the industry managers usually use IT and the technology has also the capability to ruin the system. To illustrate, airline industries can now change fair quickly with the help of IT and also any two different destination fare may variate. Similarly, these days fare and flight schedule is available frequently because of technology and it offers opportunity travel agents and travellers to shop quickly and cheaply. Consequently, numerous professional service provider industries has become less attractive as information technology has contracted the interaction personally and altering service into a commodity. It is suggested to managers to get the advantage of technology they should carefully implement it otherwise they will suffer a lot. (McFarlen, 1984)
IT is helping in the emergence of the new industries by making technology attainable. For example, telecommunication and imaging technology are integrated to assist latest facsimile services just as ‘Zapmail’ of Federal Express. Likewise, personal computing is now possible because of advancement in microelectronics. To merge numerous financial product into one product Cash management account of Merrill Lynch need new information technology. Next, IT is helpful in generating derived demand for latest products. Western Union’s Easylink service is the appropriate example of it which is a smart and developed data communication network offers various electronic devices such as personal computers, word processors to forward text to telex machines around world. This kind of service was not so important before the revolution of IT. Further, a value chain embedded company has more skills which could be market outside. Moreover, Sears got benefit of its skills not only in proceeding credit accounts but also its huge scaling is appropriate in offering identical services to others. Credit authorization and traction processing services are sold to Phillips Petroleum and Mellon Bank receive retail remittance-processing service from Sears. Identically, automotive part manufacturer A.O. Smith introduced data communication proficient to match the necessities of traditional enterprises. A.O.Smith will eventually receive job when any bank is looking for a contractor to operate ATM. In the same way, Eastman Kodak is now providing data transmission and long distance telephone service via internal telecommunication system. Where the data innovation utilized as a part of an organization's worth chain is touchy to scale, an organization might enhance its general upper hand by expanding the size of data preparing and bringing down expenses. By offering additional limit outside, it is in the meantime creating new income (Parsons, 1983).
McNamara, who is the CIO of Target stated that the trend of online shopping is increasing rapidly and most of the consumer want quick fulfillment. Therefore, to make supply chain operations more effective they are developing custom software and this software is completely compatible against complex operations. It is also added that Target chiefly rely on open source databases and data management instruments such as, Cassandra, Kafka, Couchbase, MongoDB and Hadoop. One organization must have gigantic technology as well as systems if they want highly developed and complex supply chain (Boulten, 2016).
Enterprises must keep in mind that if they are using the any particular technology then this does not mean that they are winner. New competitor in the industry can offer better services to consumers by using the specific technology in better way. A relevant example is Bing which is completely new search engine and it is using the similar technology as Google is using. However, the thing which makes Bing different is its eye-catching homepage, records all past searches, appropriate suggestion of specific keywords. So, ultimately Bing comes as a strongest competitor of Google as well as of Yahoo. So, finally it is crucial for organization to understand the need of their consumers and invest more in technology and Facebook is gaining competitive advantage by applying same strategy to serve their consumer better (Ramey, 2012).
References
Jianhong, X 2007,’ Discussion of Information Technology and Enterprise Strategy’, China Management Informationizaton, vol. 6, pp. 41-43.
McFarlane, F.W., 1984. Information technology changes the way you compete (pp. 98-109). Harvard Business Review, Reprint Service.
Parsons, G.L., 1983. Information technology: a new competitive weapon. Sloan Management Review, 25(1), p.3.
Cash, J.I. and Konsynski, B.R., 1985. IS redraws competitive boundaries. Harvard Business Review, 63(2), pp.134-142.
Porter, M.E. and Millar, V.E., 1985. How information gives you competitive advantage.
Boulton, C. (2016) Target CIO adds custom apps, fresh talent to fortify supply chain. Available at: http://www.cio.com.au/article/596290/target-cio-adds-custom-apps-fresh-talent-fortify-supply-chain/?fp=16&fpid=1 (Accessed: 19 March 2016).
Ramey, K. (2012) Use of information technology in competitive advantage. Available at: http://www.useoftechnology.com/information-technology-competitive-advantage (Accessed: 22 March 2016).