Does IT remain a strategic force for business, or is it just another tool for business to use?
Undoubtedly it is a strategic force. Any businessperson who discounts technology today, simply because we had a technology bust three years ago, is living in fool’s paradise. Technology will continue to march on, and intelligent companies will continue to face these two questions:
- How is technology making new things possible?
- Are things that we used to do, now obsolete?
These are both strategic questions.
UBS Executive Learning Center
In my view, the strategic value of Information Technology (IT) results from both the tools that are used and the ingenuity with which those tools are applied.
It is often possible to beat a rival using inferior tools, if the genius of application is sufficiently superior.
However, the longer a tool or technology is available, the harder it becomes to use the tool or technology with more ingenuity than your competitor. But that does not eliminate the possibility that it can be done. A smart organization strives to use the existing IT tools better than the competition, while it actively seeks out new IT tools that the competition has not yet discovered or applied. This is where the advantage of continued R&D spending comes in.
It is also important to point out that Information Technology (IT) is not really a “tool,” it is a concept. The collection of tools referred to as “IT” is constantly in flux and constantly undergoing evolutionary change. Paradigm shifts come with revolutionary changes.
The article mentions the analogy to railroads. Did organizations look at the railroads as a tool, or did they look at railroads as the currently available manifestation of the concept of “transportation”? Those that viewed the railroads as “transportation” were probably early adopters of the next paradigm shift: air travel. Those that viewed the railroads as “just another tool” were probably left behind.
To conclude, IT is indeed “just another tool.” However, the application of IT does provide a strategic force for a business to move forward–when it is applied with the right spirit of ingenuity and willingness to change.
President, Software Strategies & Solutions, Inc.
The information function in a business should be a mixture of commodity software and constantly evolving custom software that will allow increasing efficiency in performing the core business function and the creation of new competitive advantages in the company. Regarded from this perspective, the information system of a business is an important strategic and competitive tool because it enhances the core strengths of a successful company above the abilities of a competitor.
It is true that today many information functions can be classified as commodity items. Much of this is due to the development of standards that allow interactions to occur more easily. Another reason is that there are basic business functions that are nearly the same in all businesses and are or can be accomplished by the same methods from business to business. It can be argued, however, that in the case of the core business functions the software of competitors should be different.
A business is a group of people who have banded together to produce goods and/or services that other people want to utilize. An information system is a tool that allows this group of people to accomplish their individual tasks in an efficient manner and (in a successful company) in a way that is better than what is found in the competition. If the core business is run on a commodity group of software packages, how can one company more efficiently utilize the time and activities of its people than its competitor? All companies would have the ability to match business models with the most successful competitor, especially if they utilize the same software consulting company.