Essay on Information Technology

...

Innovation plays a crucial role in devising the information technology suitably for the advantage of a particular business, since innovation demand to do things in the creative and above all simplest way. As Breznik (2012) stated in his ‘economic and business review’, using the information technology in the most traditional way to do business would not solve the issue or would help the organization to achieve competitive advantage. He also asserts that is significant for an organization to create, develop and implement unique ways to use information technology in order to acquire competitive advantage over their rivals in the industry, and one of the ways is to improve the interaction between different stakeholders.

Bilgihan et al (2011) affirms that the existence as well as the evolution of the global information network is changing the commerce and this especially for the consumers as well as for the business. Through the term ‘change’ the authors are asserting more on the vanishing gap between the two entities; that is the customers and the company. As Bilgihan et al (2011) added to his notion that customers are not limited with the remoteness today and the difficulty on communicating the company directly is possible in the current scenario. With ease and speed the customers can communicate their issues, requirement, necessity and even desires to the organization using the information technology.

Information Technology to Develop Competitive Strategies:

In another perspective, the competitive advantage gained by the companies through information technology can be analyzed through the ‘Five Force’ framework of Michael Porter. According to Michael Porter, and industry can be analyzed through five competitive forces that moulds it (Baltzan and Phillips, 2010), and they are; Power of the competitor, threat to new entrants, threat of the new substitutes, customers bargaining power and the suppliers bargaining power.

As Porter exerted on the five forces, it is important to any organization to synthesize and implement strategies that could effectively and efficiently counter the five competitive forces. According to O’Brien and Marakas (2011), companies could adapt to any of the five competitive strategies, which are directly related to the three of the Porter’s strategies of broad differentiation, focused strategy and the broad cost leadership.

When it comes to cost leadership the companies could use the information technology to basically shift the costs of operating the business says Booth et al (2011), or in other words, to decrease the costs incurred by the business, then there by decreasing the costs towards the customers and the suppliers. For, example the companies could utilize online services such as business to consumer, or business tto business systems to reduce the costs in the operation.

When it comes to differentiation strategy, the business organizations could use the information technology in order to synthesize differentiation attribute towards their products or services or by reducing the differentiation advantage of the rivals as per Booth et al (2011). For example, a company could utilize online chat-services as well as various social networking sites such as Facebook and Twitter to comprehend the consumer necessity and requirements, and in turn serve them better. Also information technology can be created to develop inform-diaries, and there by offering value-added services to the customers, and maintain their retention towards the company; and to apply advanced tools to measure various online and offline activities (Booth et al, 2011).

As discussed before innovation has always been a major part of the competitive advantage that the company could acquire through information technology. For the identification as well as the creation of new products or services, information technology can be used, and at the same time it can also be used in the creation of the market. As Chui and Flemming (2011, p. 8) posited, “For the development of niche or a new marker or to radically bring change to business operations through automation information technology is an effective tool.” The same can be used in the development new initiatives for the establishment of any kind of online operations or businesses, since the telecommunication and internet services is capable of providing better and smarter opportunities for innovation. According to Robert and Grover (2012), open innovation and combinational innovation are two of the most effective examples. It is also important to understand that many of the infrastructural requirements of a business organization has been replaced by new components that links to information technology, and made the overall operations and activities much efficient and effective. Robert and Grover (2012), affirms this by pointing out that today the companies could combine and recombine various components or the parts to develop innovation linking to information technology. Meanwhile, the companies have numerous opportunities to co-create with its various stakeholders that are linked through various means of technology such as laptops, smart-phones and other mobile devices connected to the internet.

Information technology can also be used to integrate with growth strategies. As Rigby (2011) stated that the companies could utilize the information technology to enhance their domestic or the international activities and also used in the integration and diversification with other services and products. As an example, Rigby (2011) points out the establishment of worldwide intranet and operation base that many of the multinational companies have, and also through the establishment of omni-channel strategy to benefit growth and sustainability. On the other side, the companies could also use the technology to develop and encompass their relations with their business partners through specially catered applications, such as creating inter-organizational information system and virtual organization.

Information Technology and Stakeholder Engagement (Internal and External):

There is a common notion on the very concept of stakeholder engagement, mainly as a concept or a term used for the corporate social responsibility of an organization. However, in the relative business context, the term has various meanings or aspect to it. For some scholars and the business communities it is an idea that hovers within the cavity of CSR, while for the others it is a concept that generalize interaction between the companies and its stakeholders.

According to Noland and Philips (2010), stakeholder engagement is the process utilized by the companies to interact with the significant stakeholders in

...