Information Technology & Emerging Organizations

Thu, 11/10/2011 - 06:40 -- Umar Farooq

Information technology is changing the style of the businesses. Business operations, customer services, product designs and marketing strategies are heavily depending upon information technology. The computers, which are supporting this function, can be found on the desk, on the shop floor in the store or even in the briefcase. The reasons for the use of IT in the business are as under.

Support of Business Operations

There are many ways to information technology in business as there are business activities to be performed, business problems to be solved and business opportunities to be pursued. As a business end user, you should have a basic understanding and appreciation of major ways information systems are used to support each of the function of the business.

Support of Managerial Decision-Making

It is the information technology, provides the data for research and latest position of the market, help in evaluating in the cost of goods produced and ultimately this help the managers for correct and timely decision making.

Support of Strategic Competitive Advantage

This world is a global village. The emerging organizations are trying to get benefits out of this globalization by obtaining competitive advantages over the opponents. This competition does not occurring on small scale, the technology provide the platform to the mangers to support and compete at strategic level advantages. Strategic advantage is one which companies have over others because of its well formulated strategy in the following five major areas.

  1. Competitors’ Rivalry in the same industry
  2. New entrants in the market
  3. Threat of substitute
  4. The sovereignty of customers
  5. The sovereignty of suppliers

Development of Competitive Strategy

Variety of competitive strategies can be developed to confront the competitive forces. Some major strategies are following

  1. Cost leadership strategy
  2. Differentiation strategy
  3. Growth strategy
  4. Alliance strategy

Strategic Role of Information System

Following are few important roles, which can be achieved through information technology and information system in the emerging organizations

  1. Improving business processes
  2. Promoting business innovation
  3. Locking in customers and suppliers
  4. Creating switching costs
  5. Raising barriers to the entries
  6. Developing a strategic information base