Shape Strategy in IT - Essay Example

? Shape Strategy Affiliation with more information about affiliation, research grants, conflict of interest and how to contact Subject: Computer Sciences and Information Technology. Topic:  Shape Strategy. Introduction Competitive advantage and performance of an organization are two special terms with a complex association. Effective Information Technology (IT) turns out to be essential to support the smooth functioning of any organization. IT assists in computerizing all activities of the firm, therefore facilitating managers to focus on core competencies and strategic issues. This kind of technology helps to improve effectiveness, efficiency, productivity, cost, elasticity and service quality of the business entity. IT enabled facilities of the organization help to build up the competitive advantage of the company by providing consumers with superior services. The successful deployment and adoption of IT will enable the company to accomplish success more easily. Five specific areas where IT represents a risk to a company’s competitive advantage: The five risks that the company has to consider during the course of its business are: “the bargaining power of buyers, the bargaining power of suppliers, the threat of substitute products or services, and threats from new entrants” (Mishra, 2012, par. 1). Threat of Entry: The entry of new firms to an industry bring new ability and a need to gain market share that puts stress on costs, prices and the price of investment essential to compete in the market. Microeconomics justifies that profitable industries attract new competition until the downward pressure on costs has forced our all financial profit from the industries. The most obvious sign of a company deteriorating is its failure to address to IT communications, which is the foundation for the break of the efficiency of IT generally. This vulnerability most frequently manifests itself in insufficient environment management tools, unreliable? old hardware etc. The power of suppliers: Powerful suppliers play a significant part in controlling the price of their products and services by charging high cost for limited services, high costs in general, or changing costs according to different customers. Suppliers are powerful if they are capable of charging differentiated price. Leading IT risk units have performed extensive research and have reached the conclusion that organizations which proactively deal with IT risks reap the most profits and benefits. The power of buyers: IT risk most frequently occurs during the breakdown of the enterprise business management to help with oversight of IT in some rational governance structure. The threat of substitutes: A substitute product functions similarly to that of the organization’s products but only by a different means. Positive IT risk management creates three competitive advantages for an organization. First, there is fewer firefighting. This permits the enterprise to concentrate on more strategic and productive work. Second, the base is better prepared thus freeing personnel, resources and dollars to focus more on efforts that can increase the price of the product. Third, the project is located in a stronger location than others to charge risk and? therefore? potentially employ chances that others would think too risky. Rivalry among existing competitors: Risk both downside and upside may happen from globalization, emerging technology, data growth, vendor chain complexities, economic ebbs and flows, client expectations as well as compliance supplies. Five specific areas in which IT may support or promote a company’s competitive advantage. Threat of new entrants: The increased usage of Information technology globally has many sides to it? one of which makes the threat of new entrants high. Mainly the entry of new firms has been made possible from the transition of wired technology to wireless? and such related facilities. The power of suppliers: Strategic systems have been used to give new facilities to suppliers, to enlarge consumer switching costs, and to lock in suppliers, with the detailed purpose of attaining improved results. The power of buyers: Benefits to buyers are increased from the use of information systems. Models of SCMS are used and these make the value of a particular supplier to be recognized by competing suppliers as well as turn generate standard practice in buyers networks. The threat of substitutes: Due to increased usage of information technology? major threats from substitutes has led to decrease in the organization’s capability over the past years. Rivalry among existing competitors: “The structural implications of information technology for an organization will be determined by its effects on rivalry within the industry, its impacts on the industry’s relations with its customers and its implications for prospective entrants and the threat of substitute products” (Bakos & Treacy, 1986). Disadvantage: The disadvantages that can be seen here consist of various threats in the analysis and the functioning of system, the vulnerability analysis etc. One of the major disadvanges identified is that it leads to rise of several security issues in the business. That is? use of IT in business can generate numerous security issues? as text messages, emails, and other website communication are frequently vulnerable to hacking by unauthorized parties. These security issues can entail in serious lawful liabilities if a client’s private information has been compromised, for example “a credit card number, social security number or driver’s license is accessed by illegal means through a company’s business technology. Companies must also create internal controls to safeguard information from inappropriate actions by company employees” (Vitez, 2012, par. 3). Vulnerability analysis and evaluation is an essential element of every significant activity under the Risk Management Framework (RMF). This analysis helps to solve various risks associated with the security issues. The RMF consists of certain steps, where under each step? the business has to undergo vulnerability analysis and assessment. The six steps involved in vulnerability analysis help in the easy identification and evaluation of various vulnerabilities found in the steps where the identification is necessary. The instantaneous access that hackers have to the latest technologies and equipments demands that business become more serious and aggressive in defending the safety of their networks. Carrying out a network vulnerability evaluation or a self-induced hack attack recognizes the components of the network that are under fault, and also the procedures that expose a business to malevolent network intruders. Vulnerability in the network is a characteristic that can be broken by an outside or inside agent? like a hacking agent? or even a malware attack to break a safety policy or cause harmful consequences in the software of the system. Performing vulnerability evaluation is only one among several steps required in developing a framework of vulnerability management, however it is a very significant step and can be carried out both internally or externally. Advantages: Using the five forces as a framework, innovative strategies of an organization may be capable of spotting other businesses with great potential and a bright future. There a lot of advantages here and these are seen to help the business to become efficient and effective as well as to reach the peak of productivity and profitability. One of the main advantages is clearly seen to be the facility that enables the storing of information. The storage of information is highly beneficial as well as important for all companies. According to experts, this type of information maintains the details about vital resources that has been stored years back, which a company can use for reference when needed as well as the interested authorities can retrieve any related information within a fractions of seconds from these stored accounts. The usage of IT security is also very beneficial in protecting the data from piracy and hacking. The automated processes help in increasing the company’s efficiency by making the efforts much easier and also by reducing the strength of staff in the organization. This IT enabled advantage of the company helps the company to develop and come up with a sort of competitive advantage. “Advanced technology or innovations are not by themselves enough to make an industry structurally attractive (or unattractive)” (Porter, 2008, p. 86). Understanding structure of the industry is equally essential for investors as well as the managers. The five competitive forces show whether a business is truly attractive or not, and also they assist investors to anticipate both negative as well as positive shifts in the structure of the business before they become too obvious. A strategic IT helps the business achieve a competitive advantage in the course of its contribution to the strategic objectives of the organization and its ability to considerably enhance productivity and performance. Reference List Bakos, J. Y. & Treacy, M. E. (1986). Information Technology and Corporate Strategy: A Research Perspective. MIS Quarterly. Retrieved from http://archive.nyu.edu/bitstream/2451/27825/2/CeDER-PP-1986-01.pdf Mishra, S. (2012). Michael Porter’s Five Forces. All Rights Reserved. Retrieved from http://www.franteractive.net/Porter-Five-Forces.html Porter, M. E. (2008). The Five Competitive Forces that Shape Strategy. Harvard Business Review. Print. Vitez, O. (2012). Disadvantages of Business Communication Technology. Hearst Communication. Inc. Retrieved from http://smallbusiness.chron.com/disadvantages-business-communication-technology-1799.html Read More