IT and Its Integral Role in Producing Strategic Value

Information Technology and Its Integral Role in Producing Strategic Value

Information Technology is important in today's business world because it makes companies' operations run efficiently and handles massive quantities of information that would otherwise be time-consuming and near-to -impossible to handle without it. According to the article, "How Strategic is It? - Assessing Strategic Value", strategic value is about competition, pricing, cost, and product or market differentiation.

Information technology helps companies compete by using computers and its applications to gather information about its competitors,the economy, what is popular in their business niche, what sells and what doesn't, and also helps companies compete by producing faster and cost effective ways to produce their products. For example, Amazon is one company that uses information to sell their products.They gather user data and process it to show the user what other people bought who bought the same product they did. Walmart is another company that uses information technology to produce strategic value. A retail giant such as Walmart has lots and lots inventory that they need to manage. Walmart can't compete with other retailers if it does not keep up with its inventory and if Walmart runs out of a certain product, customers will go somewhere else to buy it and the store loses money. Through the use of computers, RFIDs, and other information technology, Walmart uses information technology to produce strategic value for its stores.

Information technology plays an integral role in pricing as well. Companies will use the internet and other information technology to gather information about prices of other companies. If Target's prices on their products became much cheaper than Walmart's, then Walmart will go out of business. Pricing is vital in our society because we always want the best prices. Pricing is vital in our economy. This is just a fact.

We can also use information technology to find out about costs as consumers. As consumers we are always looking for the best deals. When we want to find the cost of a restaurant, we can use internet applications such as UrbanSpoon, to research which restaurants fit into our budgets. Also we go to different groceries stores to find the best prices on groceries. The internet is a great way to find threads, blogs, articles, and other websites to discover which places has the best cost for us. Also companies can use information technology to calculate which processes or which investments will yield the best costs for it.

Information technology can also be used to promote product and market differentiation through the use of advertising throughout the internet. Companies use information technology to make flashy advertisement on the computer, television, billboards and other things to show consumers their product has value for them. For example, Apple has presentations with flashy powerpoint slides, videos, and demonstrations about their latest products and innovations. This cannot be done without the use of information technology.