Successful example of using IT/IS strategy for gaining competitive advantage
Discuss about the Implementation of Predictive Control Strategy.
At present, most of the business organizations are dealing with lots of data. In this context, the traditional database systems are not enough. Information systems are the most viable solution for handling the huge amount of complex data through the computer system. Actually the information system is a software program that helps to managing the operations of the organizations in customized way.
The report is prepared for a company to critically discuss the application of IS/IT strategy in the organization and how it helps the organization to gain competitive advantage over the other companies in the current market. It is a difficult for the organization to choose an appropriate IT/IS strategy to align the goals of the business with the strategy. The organization need to follow some internal and external factors for the success of the organization and maintain a sustainable growth for the organization. They also need to develop a unique strategy to distinguish themselves from its competitors in order to stay ahead in the market place.
The successful example for the successful implementation of IT/IS strategy in the current business process is Amazon. The company have aligned its business goals with its IS/IT strategy and thus gained a competitive advantage over other companies. Amazon started its business as a online book retailer in the year 1995 (Newcombe et al. 2015). The company received a huge response within a month selling books over 40 different countries and continued to grow its business throughout the world. The main person behind the success of Amazon was Jeff Bezos (CEO) of Amazon and he was responsible to operate with different companies. The company believed that innovation is the key to success and started implementing innovative ideas in their business to gain competitive advantage over its competitors like eBay (Peters et al. 2014). The company introduced new innovative services like Amazon locker, some new apps like Amazon flow, etc.
- Customer Service
Management- The aligning of business IT with the current business strategy helps the organization to get a better market position and it involves building business related activities that are important for the business. The employees or the IT professional are sent to different seminars and business events for gathering knowledge and the new recruitment is done on the basis of educational background and skill for the junior level IS/IT position (Rothaermel 2015). Furthermore training programs are arranged for the old employees working in the organization to improve their skills and learn about the new technology used in the business.
Success factor for the company’s success
Innovation- Amazon stands to be the most innovative company it is the innovator of the Amazon kindle app using which the user can access eBooks and read it from different geographical location. Amazon also introduce Amazon Prime service for faster delivery of products and use of drone for delivery falls under the innovation strategy of Amazon (Newcombe et al. 2015).
Customer Service- Amazon have a satisfactory customer service for its customer and uses different medium to reach the customer. The customer can launch a complaint regarding the product and amazon reach the customer doorstep to solve the problem and thus it build a good relationship between the company and the customer.
Execution- The working of Amazon is unique from the other online shopping websites. It has merged with different small retailers to sell a variety of products at a minimal price.
Diversification- Amazon diversified its business from an online book retailer to selling electronic and house hold goods (Rothaermel 2015). The increase in the demand of the products and their satisfactory service to the customer have lead amazon grow its business throughout the world.
The success factor that lead Amazon to grow its business and take the lead position in the market is due to the hard working and management of its employees and business. The strategies are developed analyzing the current market scenario and they are aligned with the current needs of the customer. The main factor for the success of Amazon is the prediction power about the future scope in the market and aligning the information system with its business (Newcombe et al. 2015). The result of a good prediction is an increase in organizational power. Taking of decision in a centralized manner is also an important factor for the company because it involves all the higher level manager and a better decision can be taken with the involvement of all the stakeholders.
If there is a change made in the strategy, procedure and organizational rules there is a need to change the software of the information system (refer to Figure 1). There is an interdependency acting on the information system and the organizational goals, here technology plays an important role in the alignment of the IS with the business approach. There is an interdependency on the kind of IS framework used for the assistance for achieving the goals (Pearlson et al., 2016).
Figure 1: Change in strategy
Unsuccessful example of using IT/IS strategy for gaining competitive advantage
(Source: Ward and Peppard 2016)
With the introduction of the information system the different marketing strategies are lined with the information system. The information system planning must be monitored to change it according to the change that may arise due to modification of strategy or change in the requirement of the organization.
The unsuccessful example that implemented IS/IT strategy for gaining competitive advantage is Compaq. The company have the IS/IT strategy but not timely and it became too late for the company to recover its business process. The management of the information system is a difficult task in IS/IT management. There are many research conducted on the problem of alignment of the IS/IT strategy in the current business process of an organization (Dykman, Davis and Lamb 2013). There are three steps that can be taken as a manager for IS alignment to reach the organizational goals like improving the strategy for the implementation of the information system, integration of technology with the information system and support for the commercial vision in strategic information system initiative.
Compaq failed in their business due to lack of planning and missing of the timeline when the IS/IT would be applied for the growth of the organization (Peppard, Galliers and Thorogood 2014). The company could not align the IS/IT with their business and the wrong decision taken by the executives of the company lead to a failure. The company merged with IBM and HP to produce low end systems and later on HP acquired Compaq and it was discontinued (Dykman, Davis and Lamb 2013). It face lots of struggle with its major competitor Dell it merged with different companies to grow its business but the lack of communication and R&D investment also lead the company to fail in its business.
The answer varies depending on the circumstances. The technological decision is derived by the strategic planning, choosing a new technology for the benefit of the organization without having a clear idea about the technology have no utilization for the organization. Huge investment is required for the implementation of new technology and if the technology is not understood by the user then the company might face a loss (Peppard, Galliers and Thorogood 2014). Thus in order to implement a new technology for the organization the organizational goals and the current position of the organization must be understood. This helps in pursuing a suitable action required for the implementation of the new technology (Dykman, Davis and Lamb 2013). Every organization, regardless what type or size, should have a strategic plan in place. The direction for making strategic decision and allocation of the resources to continue the directed strategy is defines under the strategic planning of the organization (Rothaermel 2015).
Lessons learned from unsuccessful implementation
The main purpose of making a strategic planning for the organization is to outline the priorities of the organizational needs that would help the organization to reach its goal. It also allows the organization to collaboratively align with the organizational goals in a significant way to make a strategic idea about the organization, about the organizational goals and the change of the organization according to time (te Brömmelstroet 2013). An effective strategic planning process results in a sustainable, integrated and flexible strategic vision framework for the years ahead. The contenders should also be analyzed and focus on the upgradation capability of the organization by keeping a niche on the market. The company should also have a focus on leverage of local assets in the current market segments where the global contenders face difficulty to reach (Rothaermel 2015). The focus of the company should be on the expanding into the market related with the current business of the organization.
There are many ways which can help the organization to successfully implement IS/IT strategy in their current business process and take it to the leading position in the market (Frahm 2016). The organization must adopt the strategy at the beginning and this helps the organization to dodge the rivalries. The company must focus on the local market and link the value chain to enter the global market scenario. The organization planning to implement IS /IT strategy should follow the following recommendation:
Adoption of the technology at the early stage would help the company to gain first move advantage (Mitchell 2013). The first mover gain the advantage of offering the new technology and service to its customer and thus creating an impression on the mind of the customer.
Application of information technology for gaining competitive advantage and build a customer focused business using the information technology. The business can be re-engineered to according to the current needs of the market to improve the cost, service, speed and quality (Peppard, Galliers and Thorogood 2014). Cross functional system can also be applied like ERP, SCM and CRM for making fundamental change in the business process or fixing poor design.
Building an eco-system model coupled with independent network of supplier, partner, distributer and alliances (Bamberger, Biron and Meshoulam 2014). The organization should build a good business model with the stakeholders to gain competitive advantage.
Implementation of the value chain in the business would help the business organization to overview the activity of the organization as a chain of process which adds value to the product and service to the customer (Rothaermel 2015). The value chain also helps the organization to find the value of the business towards its customer.
In order to remain in the leading market position the gain competitive advantage over the other companies in the market an organization need to constantly evolve and implement innovative strategies in their current business process (Andreev, Voronkov and Shafigullin 2013). Adapted to overwhelming situations in secured markets, the organization face more competitors than it is expected by the organization. The competitors can compete with the low cost products with same quality, innovative strategy to attract more number of customer, unique products, effective brands that have more brand value and loyalty of the customer. Regularly, the very survival of nearby organizations in developing markets is in question (Andrews et al. 2012). To maintain a long term sustainability the assets of the organization should be aligned with the characteristics of the industry. The development of the business should be done sustainable to remain in a leading position for a long term. Sustainable development can be categorized into different fields like social sustainability, ecological sustainability or economic sustainability. (Grant 2016). The movement of the business should be done after analyzing the sustainability of the step taken by the organization. The business should have a corporate social responsibility that helps the organization to efficiently manage its resources and build a relation with the society and thus gaining better position in the market.
The shortcomings of the rivals must be analyzed and it should be made strong in the organization to compete with the rivalries in the market. The using of organizational standards like ISO 9000 standards would also help the organization to maintain standards of the products manufactured or the service provided by the organization (Harvey and Kitson 2015). The use of ecofriendly systems and low power devices can also be helpful for a sustainable growth of the organization. The business organization must be eco efficient which includes the delivery of the products with good quality and competitively priced that supports the needs of the customer but have less impact on the environment. The sustainable development of the products also includes manufacturing of the products with minimum wastage of the raw material. With the reduction of the wastage of the raw material the organization is profited and the efficiency of the system increases (Chang 2016). Different business sectors have started implementing sustainable development for their business.
Thus sustainability of a business to remain in the leading position can be achieved with the sustainable development of the organization. The sustainable business practice should be applied in the business management and the organizational should be able to go beyond the traditional system (Ward and Peppard 2016). The organization should adopt new technology and innovation for aligning their business with the recent market trend and gain competitive advantage.
It can be concluded that the implementation of the IS/IT strategy in the business process of an organization can help the business to gain competitive advantage over other companies. The implementation of the IS/IT strategy should be done by the organization after a detailed analysis of the current business process of the organization and the needs for the organization to implement the strategy. There company faces different challenges regarding the management of the current resources of the organization and aligning the IS/IT strategies with the goals of the organization.
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