Wednesday, January 16, 2008

IT: Competitive Advantage?

Our recent class readings discussed the concept of IT as a competitive advantage. In my opinion, information technology does not provide any sustainable competitive advantage by itself. Even the greatest and most advanced IT will inevitably be reproduced and surpassed by competing products. With the increasing speed of new technology this can only be expected to occur faster and faster. Thus, even the most advanced piece of IT may only give you an advantage for a few month or weeks.
The true sustainable competitive advantages with IT are seen in the utilization and integration of the technology. Those companies who are able best use IT and develop competencies around the IT can have a sustainable advantage over competitors.
Take for example the simple piece of software, Microsoft Office. Businesses and employees around the globe have this software. Yet, does simply owning this software give any kind of advantage? Nope. What allows this product to be so valuable are the skills and competencies users have developed and the way in which businesses integrate the technology into their operations.

3 comments:

Tetsu said...

Absolutely. IT and computer advancement has beeen growing so fast in the past two decades. We are constantly looking for the latest gadgets and thinking that we are ahead of others. We tended to believe that the more advance technology we consume, the more competitive we become.

We never stop and think, "What are we doing?" For even worse, some people are so into it that they are not running the software but the software running them (their lives). Of course, this is an extreme case.

Innovation is the result of what we have now. Computer technology is only a tool that help designers and engineers to make their innovations a reality, not the other way around.

Ranjeet Deshpande said...

I don't fully agree with you. I know software and hardware change with time but it is part of the system, we have to upgrade them as we go on. I think and I am confident many others think matters or projects go smother with the help or proper use of IT.

Take for example MathCAD and ANSYS, very friendly tools helps perform difficult calculations even calculation involving seismic evaluation for crucial hazardous equipments. Many times all the users have to do is punch in few data’s and that's it. On the other hand if such things were done manually or with no IT help than god help, results can have error, will give ball park estimates, which in such crucial cases are no use. We need specifics and not ranges.

Another good example is AutoCAD, Solid Works or ProE. Excellent tools, will save time and money plus results are excellent.

What I have not experienced that such IT tools help us and make our work easy, already we are under so much pressure of time and budget. This does not mean things cannot be done the old fashion way, I totally respect that method and I am always impressed with the individuals who made those methods real, but now a days even clients prefer results from such soft wares, they get a peace of mind. In short to move in future IT will definitely help, now days it has become a part of day to day business.

Jennifer McEvoy said...

I completely agree. It is not owning software that gives a company a competitive advantage; it is how the company utilizes the software to their advantage. Utilizing the software is where competitive advantage comes in to play. It does a company no good to own software that they do not utilize.