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Information technology, has changed in many ways how business conduct day today

transactions, how they collect knowledge from their industry, how they market
their products and moreover how they integrate technology into their business in
order to gain the competitive advantage.However there several critics that claim
that Information Technology has not been as revolutionary as once thought. It did
not revolutionise they way business is conducted, the basis is still there, and
the traditional ways of conducting business are still there. Information
technology, has evolutionised the way business is conduct, it became more
effective, more specific, but it is not radically transformed.

Nicholas G. Carr’s article on Harvard business review, in 2003, and the later his
book Does IT Matter?: Information Technology and the Corrosion of Competitive
Advantage Does IT Matter?: Information Technology and the Corrosion of Competitive
Advantage, shed some light onto these issues. Carr (2004), claims that although
technology can be used effectively to provide and advantage over rivals, today it’
fails to do so and has become a commodity. All business use technology, and spend
millions on new IT projects and resources that are not as successful as estimated.
Technology, although critical to the success of a business, it is common in all
segments and has lost its core function. Services, software and hardware are
replicated by suppliers, hampering innovation and decreasing the strategic
importance of technology.Carr however does not deny that Information can and has
been evidently used to provided the competitive advantage, but notes that it’s not
what technology a business has in its arsenal but how that technology is used, and
integrated into the business processes to create a framework in which IT provides
added value to the company’s business processes.So it is possible for a company to
use information technology to gain the competitive advantage as long as it
innovates and embeds information into its business processes and manages
information as a corporate asset rather than an external resource.Although
information has not changed or revolutionised the way business is conducted, it
did however alter the way businesses operate and has transformed enormously, the
industry structure (M.Porter Competitive Advantage).This was also witnessed with
e-commerce. E-commerce and the use of information altered the relationship,
between competitive scope and competitive advantage (M.Proter, 1985). E-commerce
has radically changed the scope of competition by removing barriers and
transforming transaction from local to national and international level. Moreover
with the computing power, of today, the internet the software and hardware that
are manufactured, individuals can run their own business from home without having
a front-end but rather a virtual organisation which deals with customers and
transactions over the internet. However this does not mean that companies will
gain the competitive advantage by ‘going digital’ and ignoring existing
traditional ways of doing business. Porter (2001) argues that , companies will
gain the competitive advantage only if the use the internet/Ecommerce to
complement their existing business strategies, products and best
practises.Organisations however have to be careful; the competitive advantage of
the first mover is today non-existent , and the sheer number of dot com’s signal a
very low barriers to entry, thus having new technologies in place, and using e-
commerce to lower costs and increase profitability does not create value.
(M.Porter, 2001)It is a fact however, that the internet and the general use of
internet technologies if used correctly can offer the competitive advantage to
companies. Two factors, determine profitability in this case, the effects on
industry structure in which competitors function and the sustainable competitive
advantage which one company outperforms the other. (M.Porter, 2001)There are a
number of issues however that companies need to take under consideration,
especially the effects of technology on the five forces model and the value
itself. The effects are both negative and positive, and every decision needs to be
measured against these effects .Moreover, the industry is affected by the power of
buyers and sellers and the products that are involved.This however shouldn’t be a
problem, eCommerce will not change traditional ways of business but it transforms
the process that ultimately affects the end result.Based on the above, it is
obvious that the rate of replication, of products, technologies and systems and
the low barriers to entry in this market segment by competitors, has made a big
number of companies obsolete. The way companies can and should differentiate
themselves from competitors, in not by lowering prices, no by aggressive marketing
and retention of large client number’s or shares of the market but rather by
achieving a sustainable competitive advantage by having low operational costs,
value added products, low production costs and excellent customer service.
Technology of course is already embedded in the above, thus companies have to
consider technology as valuable corporate asset and should manage it as
such.Having said that, I believe that the point that needs to be understood by all
parties is that however effective operations are, no matter what technologies and
ways of trading are used, or whether the company’s prices are low, if a strategy
is not in place to reflect the new E-business, flexibility and effectiveness go to
waste and take up more resources and generate negative and unwanted effects and
circumstances. ”Strategy goes far beyond the pursuit of best practises”( M.Porter,
2001). It also involves the configuration of to reflect the e-business, to
incorporate and integrate technology to business processes and most importantly to
embedded value into products. The organisation must use and manage information and
management as means to differentiate its business to the way competitors conduct
business. Having a universal strategy that every part depends on the previous part
and determines the next, it will undoubtedly be very difficult for competitors to
replicate and follow up.Companies thus must focus on other segments such as
product quality, information and knowledge management, but in order to achieve
this companies have to take small steps and learn from others so that the same
mistakes are not repeated

References:
1. Porter Michael E, Completive Advantage, Creating and Sustaining superior
performance, Free Press, New York, 1985