SESSION 5 - Investing in the IT that makes a competitive advantage

Question 1

Whats the paper about?

Answer 1

• competitive dynamics are most apparent in sectors that have spent most on information technology (eg markets for digitised products like computer software and music)
• internet & enterprise IT are now accelerating competition as innovators with better ways of doing technology-enabled processes can scale up with speed to dominate industry  winners can win big and fast but not necessarily for long due to highly competitive & dynamic
• aim of paper: explore link between technology & competition and why it has become much stronger since mid-1990s

Question 2

Whats the management challenge for deployment?

Answer 2

• deploying a consistent technology platform
• manager extra responsibility: determining which aspects of companies’ operating models should be globally (min widely) consistent, then using technology to replicate them (fragmentation + autonomy)
• oftentimes very time-consuming & expensive to form systems so that all can use common data and enforce standardised processes  often do not remain standardised for long as software is deployed in many other ways than intended

Question 3

What are IT-enabled opportunities for innovation?

Answer 3

• separating from competitors by coming up with better ways of working
• data analytics drawn from enterprise IT applications & web 2.0 technologies aid in propagating & integrating technologies = thus forming own/better ways of working (business innovations

Question 4

Whats the role of decision rights?

Answer 4

• many choices about business processes are taken out of business-unit managers & regional managers and appear to lead to more centralised-decision making but line managers and employees often end up with more discretion within the processes to serve customers’ needs & to apply tacit, idiosyncratic or relationship-specific information only they have
• example: Zara has common processing of ordering by filling in digital form at same periods of time but managers at each location determine what clothes they order in which quantity

Question 5

What are the conclusions of the paper?

Answer 5

1) IT has sharpened differences among companies instead of reducing them
2) line executives matter: real value comes not from people that implement them in first place but from process innovations that can be delivered on platforms
3) competitive shake-up brought on by IT is not complete