In today‘s market, the rate at which technology is changing is amazing and to keep up with this leaders have to fast pace their activities. Since the change is too fast even the CIO of the organization finds it difficult to stay abreast.
Technology is changing and growing too fast for even the CIO of an organization to keep up with, let alone the CEO. Decisions like company direction, areas of business growth and new technology to incorporate ultimately falls in the hands of the CEO. At a point of time, information technology was so expensive and so difficult to manage that companies could make large amounts of money simply by being able to make systems work. (Think I.B.M.)
Managing Information technology effectively used to be a big competitive advantage to companies. But over the years, since it has become more manageable and cheaper, this advantage takes a back burner. Factors like hiring knowledgeable employees and tools to manage the technology has become easier and more powerful than it used to be a few years ago. Nowadays anybody can set up a Web server, or an accounting system, or an inventory management system.
When a technology is so complex that the only way to make things work is to copy what you already have in place and that acts as a competitive advantage. And since only the incumbent have something to copy that would makes it difficult for new companies to enter the industry. And if one of them gains some temporary competitive advantage by building an inventory management system, the others will soon follow. That doesn’t really make it foolproof!
It is not information technology itself that matters, but how you use it.
When information technology is turned into a ‘commodity’, it no longer serves as a source of unique competitive advantage, and then we still face a critical question of advantage. Standardization and commoditization of a technology don’t always mean that innovation stops. Once products become commodities, they can serve as components for further innovation. In the 19th century the real innovations came after the basic building blocks were commoditized.
Then maybe we can look at information technology as those standardized parts. Desktop PC’s, Web servers, databases and scripting languages have become components in larger, more complex systems. As these components have become more standardized, the opportunities to create innovations have multiplied.
Do such innovations offer “sustainable competitive advantage”?
The answer is maybe, maybe not. Truly sustainable competitive advantage is a high hurdle. Doing something better and cheaper than the competition is always valuable, even if the competitive advantage is only temporary.
No matter what, leaders cannot afford to ignore information technology, or relegate it to the back burner. A study shows that 53% of ERP projects still run over budget, 61% take longer to complete than anticipated, and more than 27% fail to produce the positive ROI expected. Such IT-related problems aren’t just rooted in technology but more in leadership failings. The people implementing don’t understand such IT problems. As a result they don’t provide adequate resources to solve them, and don’t approach the issues as members of unified technology-literate teams.
The functionality of computing undergoes constant, dramatic increases, and as it does so, it opens huge new opportunities and leaves the company vulnerable in unexpected ways. While technology can’t give you a permanent competitive advantage, timely deployment of new IT products, processes, and systems can enable you to build a strong competitive position.
Corporations’ technology strategies will remain ineffective until leaders acknowledge that, now as always, IT does matter.
For details list of Top 8 key Trends to look out in 2014, you can visit Vovox.