UNIVERSITI UTARA MALAYSIA

BKAS3113 SEMINAR IN ACCOUNTING INFORMATION SYSTEMS

FIRST SEMESTER SESSION 2017/2018 (A171)

ASSIGNMENT 3

IT INVESTMENT

PREPARED FOR:

DR. ROSLI MOHAMAD

PREPARED BY:

HARESHINIA MAHENDRAN 231567

KIRTTANA SAMBATHAN 243250

SUBMISSION DATE: 14 DECEMBER 2017

 Based on the Carr’s article, the title of “IT doesn’t matter” explained that Information

Technology(IT) will not long to be important as the strategic become less for firm’s

sustainability. This is because IT become common and anyone can easily afford to access, and it

seems that IT is available surrounding us. As the rapid growth of IT, most firm concern on IT

investment as the potential for a greater competitive advantage without considering risk. Thus,

Carr emphasizes that huge IT investment doesn’t guarantee any opportunities in the competitive

market besides small IT investment may result in a positive opportunity in the future competitive

market.

Firstly, Carr’s argument was IT has no inherent value when IT transform into a

commodity. He focused on the components of IT such as hardware, software and even the

process of IT has not any inherent value. The acquisition of components of IT is just waste of

money without considering the effective use of IT. This is because Carr advice to not overspend

on IT but do maintain and manage the risk level. From the point of Sarup, he stated that IT still

provides the value if IT being used in an innovative way. By effective and efficient use of IT, it

will create the possibilities for gain the opportunities to differentiate other competitors in the

marketplace. Sarup forces his argument that effective and efficiency use of IT provides more

value instead of relying on IT application only.

Strategic advantages comprise from how the IT been used in the competitive market.

The firm can also set advantage and act on possibilities before other competitors do enhance the

differentiate in the marketplace and generate the profit. For example, by understanding and

analyzing the way to use IT in order to fulfill the business requirement which should create the

business intelligence with customized such as CRM and ERP for greater customer’s satisfaction

and enhance firm’s performance. Although for the most firms, they keep adapting the change of
IT for survival in long-term market. The firm must understand and analyses the business process

to fulfil requirement before the implementation on IT takes place to give a huge competitive

advantage.

Next, the firm needs to keep tracking the evolution in advanced IT to prevent the failure of

business to survive in future. Carr also argues that early build-out stage of IT acts as proprietary

technologies and end of buildout phase became infrastructural technologies. The proprietary

provides a competitive advantage because it is unique and has the barrier to another competitor

to increase the benefit. The factors that transform from the proprietary technology into

infrastructural technology is the transport mechanisms which carries the digital information as

similar railroad and power. Lastly, price deflation also essential as a vanishing advantage when

IT becomes affordable to acquire as an application. Sarup has commented that Carr mistakenly

make by the difference between IT and early stage of infrastructural technologies. Sarup

explained that there will be always new technology arises by the rapid growth of the pace

according to the change in IT in order to create greater differentiate. Otherwise, the advantages

of the first mover who willing to take a risk and gain the competitive edge. For example,

Amazon company is the first company that conducts business based on the website to allocate

the products and service around the worldwide.

Furthermore, Carr also stated that IT also increase replicable from other competitors

because it will vanish the long-term competitive advantages. When IT being outdated, the firm

will be outsourced from the third party instead of building its own IT application. Sarup argues

that IT alone couldn’t ensure that the advantages but also need to consider information
capabilities in IT itself. Beyond of using the IT applications, it’s better to use the source of

knowledge to attain customer orientation. This is because to achieve long-term sustainable

advantages by continuing satisfying the customer ‘s needs. Thus, firms need to understand and

make analyses of customer, product, services, process and find a way on how to integrate IT to

improve firm’s performance by organizational capabilities. Organization capabilities play a role

in the integration of different complimentary resources to facilitate better IT values for the firm.

The core function of IT involves standardization and homogenization, as it is very rarely

in customized and developed in-house software. Thus, increase generic application among the

competitor. Next, is the involvement of Internet provides the perfect delivery channel for generic

application which easily outsourcing from the third party based on the “web-service “. In simple

word, IT has been converted as a utility. Most of the firm will find an alternative for gain from

end buildout stage from an infrastructural technology as it is a cost benefit. Due to an

infrastructural technology, it does not give a long-term sustainable competitive edge. From the

Sarup explanation, common infrastructural technologies do not decrease the competitive but

increase it. Sarup manifest to not only focus on software application but also proceed to

alignment in business process and practices. He forces that the importance of business processes

is to provide a greater differentiation.

In the conclusion, the firm concern more in cost saving and risk assessment but at the

same time, they want competitive advantage by increasing the firm’s performance. That’s why

Carr didn’t mention that IT is not important but just be aware of investing in IT. Other

opponents, Sarup gives brief on the mixture of IT resources and capabilities that will deeply
provide a sustainable differentiation. This deeply embedded firm has a lot to consider which in

influencing the competitive edge such differentiation product, efficient use of IT information,

innovation, alignment business process, right business strategic, involvement of IT and internet

and understand customer’s satisfaction. Last but not least, the firm cannot have expected the

benefit in short-term after investing on IT. It may take a longer time to produce the outcome.

From my analyses on the whole article review, I can summarize that “Don’t spend more in IT,

but be smart in using the IT in an innovative way”.

 Report Writing Rubric

Semester Session : __________________________________________________

Course Name ( Course Code) : __________________________________________________
Lecture Group : __________________________________________________
Student Name (Matric No) : __________________________________________________
Task description : __________________________________________________

CONTENT (Report Writing)

Traits Poor
(0-3)
Organisation Totally unrelated.
The information appears to
be disorganised.
Information One or more topics were
not addressed. Information
has little or nothing to do
with the main topic.
Analyses Provides insufficient
evaluation and critical
analysis of the topic in
terms of research and
comparison to similar work
done by others.
Grammar & Many grammatical,
Spelling spelling or punctuation
errors.
Appearance Unacceptable appearance.
Does not use appropriate
table, figure, font, font size,
line spacing, and border
areas. Unclear style.
Fair Good
(4-6) (7-9)
Remotely relevant. Somewhat relevant.
Information is organised but Information is organised with
paragraphs are not well- well-constructed paragraphs.
structured.
All topics are addressed and All topics are addressed and
most questions are answered most questions are answered
with about 1 sentence each. with at least about 2
Information clearly relates sentences each. Information
to the main topic. No details clearly related to the main
and / or examples are given. topic. It provides 1 - 2
supporting details and / or
examples.
Provides somewhat Demonstrates thoughtful
adequate evaluation and evaluation and critical
critical analysis of the topic analysis of the topic in terms
in terms of research and of research and comparison
comparison to similar work to similar work done by
done by others. others.
Some grammatical, spelling A few grammatical, spelling
or punctuation errors. or punctuation errors.
Appearance is acceptable Appearance is generally
but a lot could be improved. good; only some elements
need to be improved
Excellent Score
(10-12)
Directly relevant.
Information is very
organised with well-
constructed paragraphs and
subheadings.
All topics are addressed
and all questions are
answered. _____ x2
Information clearly relates
to the main topic. It
includes several supporting
details and / or examples.
Demonstrates sophisticated
evaluation and critical _____ x2
analysis of the topic in
terms of research and
comparison to similar work
done by others.
No grammatical, spelling
or punctuation errors.
Excellent formatting and
appearance. Use
appropriate table, figure,
font, font size, line
spacing, and border areas.