AFM241 Study Guide - Midterm Guide: Systems Analysis, Enterprise Resource Planning, Information Technology Management
Senior executives operate under the assumption “if we use IT to gain greater control over
internal processes, we will be better able to respond to environmental uncertainty and the
emergence of new competitors”
Firms with strategic positioning focus are building their competitive advantage or enjoy a competitive
advantage
Similar to turnaround mode
The firm has identified the kind of positioning and the next step will be to achieve the
necessary operational effectiveness in the appropriate unique value activities to support it.
Use IT to create or enhance the value proposition to their customers
Firms of dual focus are like to enjoy a sustainable competitive advantage
Can be used for both operational effectiveness and for improving strategic positioning
(strategic mode)
Firms with no focus are likely to be in a position of competitive disadvantage
These firms are NOT in support mode because a firm that chooses to take an IT approach
that matches to the support mode has made a rational choice. They want to specialize not in
IT but else where.
On the other hand, firms with a low priority in terms of its focus is a firm with no strategy
The bottom line is that an organization that aligns its IT strategy with its business strategy; will derive a
greater strategic use from IT, will achieve superior financial performance, and improve its competitive
position
1.6 Payoffs from IT Spending – Part 2
Simply investing in IT assets will not grant a firm a competitive advantage
Focus on how to use IT assets and resources to IT capabilities
A capability is a firm`s ability to leverage its assets and resources in order to achieve a particular
outcome.
1.6.1 IT Capabilities
Effective Implementation Capability: the argument regarding the importance of effective
implementation and use of IT rests on the fact that a significant percentage of all IT projects undertaken
in any year will either fail during implementation or fail to meet their objectives.
A project is deemed successful if its completed on time and on budget, with all features and
functions as initially specified
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Document Summary
Senior executives operate under the assumption if we use it to gain greater control over internal processes, we will be better able to respond to environmental uncertainty and the emergence of new competitors . Firms with strategic positioning focus are building their competitive advantage or enjoy a competitive advantage. The firm has identified the kind of positioning and the next step will be to achieve the necessary operational effectiveness in the appropriate unique value activities to support it. Use it to create or enhance the value proposition to their customers. Firms of dual focus are like to enjoy a sustainable competitive advantage. Can be used for both operational effectiveness and for improving strategic positioning (strategic mode) Firms with no focus are likely to be in a position of competitive disadvantage. These firms are not in support mode because a firm that chooses to take an it approach that matches to the support mode has made a rational choice.