The world has grown more than enough in the context of information technology in such way that organization work more efficiency to enhance and maximize their daily productivity. Storage devices, data protection, cloud application and faster communication are the main advantages that information technology can provide to businesses. IT/IS has big impact in computer application on which nearly every work environment is dependent, therefore, since those applications are computerized and widely used, it is advantageous to incorporate IT into business.
Information technology is categorized into major three group known as operation, financial and strategic system. If the operation and financial system are well integrated may result strategic system for other enterprises, however, it depends on the core business objective of the enterprise. For instance, cloud application and cloud storage are advance technology where most of the organizations are not aware of it, organization don’t consider much about technology even though the applications are flexible to use and cheap to implement, it suitable and fit the business objective of the enterprise depending on the business requirements. the issues come up from organization that there is no aligning between information strategy(IS) and business strategy(BS) which resulted to failure on productivity or IS. However, today some organization seems to pay much attention to align BS and IS to improve organization strategies(OS), thus, helps to organization to improve or reengineering organization process as well as gaining knowledge and experience to sustain the competitive advantage.
Business is always looking for a competitive advantage which require identifying a specific target customers with clearly define their demands. Indeed true, organization can archive and stay competitive only when they deliver a high quality and cost effective product or service and performed better that any company products. In other hand, the key factor here is cost of the product or services, the cheaper the product or service is the more customer you get it, therefore to gain competitive, organization has to make sure that their service or product are reliable and perform better than other product, furthermore, they have increase investment, differentiate their service from other industries, be innovative by come with new idea for short period as well as finding a mean to lock-in their customers.
Cost Reduction Through IT
Cost reduction through IT is business strategies where most of the organization used to reduce cost of products or services provide and increase profit. In 2014, the air Asia CEO reveal the company business plan that the airline will more attention on reducing the cost in order to improve the profitability. Therefore, so many changes were done to archive organization goal include the implementation of automation of check-in procedure, in other hand, number of staffs who are manually performed check-in have been reduces. Furthermore, the company goal is to lower the overall cost by 7.5 % in 2014 and they really archive that, they manage to reduce the cost by 2.5% within the first two month. Therefore, while Air-Asia improving efficiency of their operation, they manage to obtain competitive advantage over other airlines by reducing the cost of operations as well as cost for customers that lead to stay in top in business market.
Differentiation Through IT
Differentiation is another business strategy where industries manufacturing distinctive product or service to set their business apart from competition. Industries that used differentiation strategy can be either highly skilled or they provide a creative products or services or they might have a strong sale force that brings a reputation for their innovation and quality products or service. For instance, the McKesson Corporation has decided to use differentiation strategy by responded the competitive pressure by offering Economost user an integrated software package, the system was installed in warehouse and it provide information of product to stock, how to plan shelf and floor space in the store in order to archive maximum sales. This led to large increases of profitability for the drug store using Economost system. The result was a major structural change in the industry as only the most efficient and effective competitive pharmaceutical remained and keep stay a head of the competition. This prove that IT can be the source of competitive advantage, however, those advantages to be sustainable, industries have to consider more on learning techniques rather adopting IT in order to continuously come up with new ideas, innovations and use those ideas to enhance their system or service for future business competition.
Innovation Through IT
Innovation is a business strategy where a company invests in the Research & Development (R&D) department to provide a platform for coming up with new products in the market that would attract the customers interest. Becoming a digital leader in the industry helps to set one organization apart from the others in relation with competitive advantage. Due to the fast evolution of technology, it is essential to compete in the market by having skills and talents to cope up with an increasingly complex and ever-changing market. Uber Technologies Inc. was able to revolutionize the transport industry, by giving access to cab-riding public the possibility of booking a cab through the use of a mobile app on their smartphones. Uber implemented this disruptive innovation technique by introducing simplicity and convenience when booking a cab. Through the use of technology, Uber brought a concept of “shared economy” in the cab industry by allowing customers to share the taxi fare.
Customer Lock-In Through IT
This is a business strategy whereby a company uses Information technology techniques to retain their already existing customers in order to achieve competitive advantage. Customer lock-in is a business strategy that has enabled industry leaders such as Amazon, Apple, Microsoft, Rolls Royce to retain their customers and outcompete their competitors by utilizing Information technology techniques. For Instance, Mobile technology companies like Apple and Android devices use the concept of ‘Data trap’ to lock-in their customers. Both companies host content and applications on their marketplaces like the AppStore and Google Play Store that can’t be transferred elsewhere. Hence, to switch from one mobile technology to another, one would have to give up their purchased apps, movies and music tracks. Due to this reason, many customers prefer to use only one between Apple and Android phones as it is inconvenient to switch from one to the other.