Competitive advantage

Competitive advantage can be gained only if information technology (IT) will be used strategically in an organisation. Empirical research within companies into the interdependency between competitive advantage (Porter) and IT indicate, that a strategic dialogue is necessary, developing a corporate strategy. This dialogue is between competition strategy and IT, while the organisation structure cannot remain out of consideration.

In the previous decades IT is playing a more and more distinguished role in the operational practices of organisations. IT concerns the automation of the information flows within and between organisations. Information has been added as a production factor to the traditional production factors land, labour and capital.

Although the costs of automation in absolute sense have decreased (Moore’s law), the total investments in IT have increased. Newer technology and increasing knowledge on the possibilities always make more sophisticated applications possibly, with each time more possibilities than before. However the exploitation of those increased possibilities is no commonplace. Research has shown, that particularly the strategic use of IT leaves much to be desired and so does the ROI. What is the cause?

Organisations gain strategic advantage with IT, only when there is a fit between IT-, competition strategy and organisation structure. The strategic advantage of IT cannot be explained by IT separately nor by the fit of IT with competition strategy only or with organisation structure only.[1]

Only a structural approach of the use of IT in organisations appears to lead to a clear competitive advantage. An information architecture approach with a strategic dialogue between organisation structure, competition- and information strategy leads to perceptible advantages.

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[1] Breukel A.W.V., Strategic IT, but not by Itself (Capelle a/d IJssel: Labyrint Publ., 1996)