What an IT do for business Research Paper Example | Topics and Well Written Essays - 1000 words

What an IT do for business - Research Paper Example Information technology is developing at a very great speed, particularly in the business world. Many firms are using the internet for various functions to enhance their production efficiency and augment their marketing strategies. However, key among these is the use of technology to increase the competitive advantage of firms. This paper analyzes how a company/business can use information technology to increase its competitive advantage. Introduction Internet has changed the structure of global markets and made it possible to hook up to other systems, people, and companies, without the restrictions of time and space. The dispersion of such a system is purposefully significant for economic development of every country. With the development and progression of the information and communication technology (ICT), competitive advantage plays a vital role in contemporary companies and businesses (Cicak, 2010). Information network comprises diverse types of software platforms and databases, which the companies use to increase effectiveness and augment their competitive advantage. These include venture-wide networks devised to administer all principal functions of the company provided for instance SAP, PeopleSoft, and JD Edwards among others. They also include more general-purpose database creations aimed at specific uses for instance the products provided by Oracle, Microsoft, and many others (Dewett & Jones, 2000). Ways in which information technology helps in generating competitive advantage The fundamental means for understanding the impact of information technology on companies is the value chain. This is the set of procedures harmonized to produce a certain product or service and offering it to the consumers. In almost all industries and companies, information networks carry out several separate but interrelated activities that affect the procedures like production, fabricating, advertising, selling or delivering products to customers. Modern industry is endeavori ng to reinforce relationships with clients, generate new revenue opportunities as well as lessen supply chain inadequacy. The directness of Internet networks ensures ultimate compatibility with other technologies and the volatility of internet-based information systems (Cicak, 2010). Because of advancements in information technology, buyers have easier access to information concerning products and providers, therefore boosting their bargaining power. In addition, internet networks tend to lessen variable costs and to generate considerably greater pressure for firms to engage in vicious price competition. Although internet affects the operational efficiency and strategic positioning in various ways, it also offers new opportunities for reinforcing or realizing strategic positioning (Cicak, 2010). Information efficiencies (INE) are the savings on cost and time that effect when Information Technology permits individual workers to carry out their present tasks at a higher stage, take on extra tasks, and enlarge their positions in the company because of progresses in the capability to collect and evaluate data. On the other hand, information synergies (INS) are the routine gains that outcome when Information Technology permits two or more persons or subunits to merge their resources, cooperate, and collaborate across function or subunit limitations (Dewett & Jones, 2000). Another way in which network technology helps to create competitive advantage is through differentiation. Information technology helps a company to differentiate itself through various aspects. These include pricing, product improvement, and shorter-time to market as well as customer service. Furthermore, information network can help a company offer customised products and services, therefore improving differentiation and competitive advantage. Supported by the Internet’s interactivity aspect, for instance registration form and E-mail, a company can easily gather customer information includ ing