How Competitive Advantage of Organization is Enhanced with the Introduction of New Technology - Essay Example

?Discuss how an organization’s competitive advantage can be enhanced with the introduction of new technology Introduction: What is technology? Technology in simple words means a machine or an electronic device that makes human work easier and faster. Advancement in technology has not only resulted in improved efficiency in the distribution process of the products but has also made production and communication quicker and simpler. Use of latest technology can give an organization a competitive edge over others as it helps companies reduce its overall cost and at the same time increase its production which in turn results in increased profits. However, technology at times can result in negative outcome; therefore it is essential for the organizations to perform financial analysis in order to find out the over cost that will be required to implement technology and compare it with the expected revenue. If according to the analysis the expected revenue is more than the technology’s cost then only the company should plan to take the decision of installing the machine. There are several benefits of implementing technology; some of them are discussed as follows: Technology helps reduce cost One of the most renowned company, Procter & Gamble makes use of latest technology to reduce its inventory cost. This company makes efficient use of computer technology to keep track of the amount of products or items that its retailers currently hold in stock so that it can immediately get restocked when required. Makes Distribution Easier Right coordination between distribution channels is not very easy but with the introduction of new technologies, this task has been made easier for the organizations. Just-in-time system helps in better planning of item delivery and can reduce cost of storage. Thus, implementing technology in the distribution process and doing extensive research and intellectual planning can help improve delivery time and give organization an opportunity of further growing their business worldwide. Increased Revenue As mentioned earlier, implementation of technology also results in increased revenue. Lets take an example of a very popular automobile company “Ford”. Ford today is considered to be a technology driven brand. According to the vice president of Ford, Derrick Kuzak, every product sold has added to increased revenue. He further stated that average revenue per vehicle has increased up to fourteen percent from the year 2008 to the year 2009. This increase was due to the implementation of latest technology, “Sync in-car communication system” in the vehicle. This system provides car drivers a hands free facility to control their cell phones and media systems. Derrick Kuzak stated “Technology has contributed majorly in enhancing our brand and further expanding our business” Makes Communication Easier Advancement in technology also makes communication easier and faster. Through the introduction of new cell phones like blackberry, easy communication between employees through email and blackberry messenger has been made possible. Blackberry service notifies the employees about any new email that comes in their inbox and allows easy exchange or transfer of files and images, providing them with an opportunity, to perform their job sitting home. Various Technologies presently being used in Organizations Majority organizations implement Transaction Processing Systems. This system helps produce data, based on daily operations happening in the company. It produces data regarding inflow and outflow of materials, sales, credit and deposits etc. In simple words, this system provides an answer to all the queries that operational managers might have on daily basis. Another most useful system that is being used world-wide is the Management Information System (MIS). This is a technology that is useful for producing reports containing information useful for middle level managers to do short - term assessments. There are several other useful technologies or systems that help companies gain competitive advantage. Some of these systems include: CRM ( Customer Relationship Management) system, Decision support system, SCM (Supply Chain Management) system and many more. Like Management Information System (MIS) helps make middle level manager take short-term decisions on the other hand, decisions support system helps middle level managers take long term decisions. These decisions may be, to whether open up a new branch or office in another country or not and it also identifies the advantage, disadvantage and difficulties, an organization might have to face in opening any new branch or outlet. SCM (Supply Chain Management) system helps the production process to function more efficiently. Companies like Dell, world’s largest PC producers, has gained competitive advantage over others using this system, by selling computer products to order and in turn reducing inventory cost. In addition to Del, Wall Mart is another famous company which has adapted various technologies throughout in order to further enhance its business operations. Some of the technologies that it has adapted in the past years include bar-codes technology, to improve its inventory management process, Electronic Data Interchange, to have smooth communication and interaction with its suppliers, and last but not the least, Supply Chain Management (SCM) system to achieve competitive advantage. Furthermore, Supply Chain Management System (SCM) has also benefited Fedex, which is one of the renowned courier service company worldwide. Implementing SCM system not only enhanced their network speed but also made communication much more efficient and faster. In addition to this, this system also helped them improve their product tracking process and package handling. Setting up CRM (Customer Relationship Management) system in your organization will not only, as the name suggests assess all the customer-related queries and problems but also proves to be a useful tool for sales and marketing. It evaluates the methods to increase company’s revenue and how customer service be further improved. Examples of Industries Benefiting from Technology One industry that is benefiting the most from technology is the restaurant industry. For restaurants it has now become essential to install technologies which could help customers order their meal online. In addition to other industries that are gaining benefit from the development of recent technologies, airline and hotel industry is also making most out of it. Hotels and airlines make use of tools that allow customers to make reservations of tickets and rooms online. This technology has not only made it convenient for the customers to book their tickets and rooms sitting home but has also resulted in huge profits for the organizations. Moreover, other benefits provided to the consumers through online reservations include discounted airfares and easy cancellation of the booking made earlier. Social networking websites like Facebook and LinkedIn has made it easier for the management or employers to deal with customer queries, post upcoming events and also to locate candidates that match their job criteria. One most popular perfume brand Old Spice has also benefited via internet technology by revitalizing their brand through uploading videos online. It has been seen that majority population spend much of their time online than watching television. Furthermore, online marketing is not only one of the most effective methods of marketing but is also cost effective. Conclusion In conclusion I would like to say that in order to sustain a strong position in the market; technology has played a very crucial role and has benefited both, the organizations and the consumers. Latest technology is an added advantage for the businesses to thrive in today’s ever changing environment. However, it is essential to make use of technology sensibly depending on the financials available with you rather than copying your competitors. Bibliography Chukwurna, O (2009) GAINING COMPETITIVE ADVANTAGE USING EFFECTIVE SUPPLY CHAIN MANAGEMENT [Online]. Available from: http://hosteddocs.ittoolbox.com/OC111408.pdf [Accessed: 26 March 2011] Infor (2011) Customer Relationship Management Software from Infor [Online]. Available from: http://www.infor.com/enterprise-software/crm-hub/crm-software-application/ [Accessed: 26 March 2011] Ghandi, J (2010) Technology Drives the Airline Industry [Online]. Available from: http://ezinearticles.com/?Technology-Drives-the-Airline-Industry&id=4764781 [Accessed: 26 March 2011] Network Infrastructure Corporation (2009) Technology in the Hospitality Industry [Online]. 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