Strategy and information technology

Information Technology (IT) is critical in strategic management as it helps organizations to improve their operational efficiency, gain a competitive edge, and make better decisions. IT systems provide access to real-time data and analytics, facilitate communication and collaboration among employees, and support automation and process improvement. In short, IT enables organizations to make better strategic decisions, improve performance, and achieve long-term goals and objectives.

One of the main question asked by managers is: how information technology can contribute to the implementation of business strategy? The following are the possibilities offered by information technology in the case of the implementation of various management strategies.

Strategy of lowest production cost

The strategic value of information technology is manifested in this strategy in the following ways:

• Allows for a significant reduction in employment in the manufacturing and administration positions
• Improves the use of the means of production by improving synchronization, planning, scheduling, etc.
• Allows to reduce inventory, improve control of accounts receivable
• Enables better use of materials and reducing waste
• Gives managers the ability to differentiation, raising the value of the product in the eyes of consumers

Differentiation strategy

• Information technology is a key component of the value chain of a product.
• IT tools can significantly shorten the production preparation period (testing, computer aided design, CAD/CAM, etc.)
• Modern technologies allow to adapt the product to the consumer's needs
• Allows to elevate customer service and increase customer satisfaction

Niche market strategy

• IT tools allow to better identify the specific needs of customers.
• Key success factor is the close contact and understanding of the customer possible by using communication technologies.

See also:

• Functional strategy

Strategy and information technology — recommended articles

Business improvement — Logistics information system — Strategic cost management — Efficiency of management — Extended enterprise — Structure of strategic information system — Strategic information system — Benefits of strategic management — Integrative function of logistics

References

• Mintzberg, H. (1994). The fall and rise of strategic planning. Harvard business review, 72(1), 107-114.

Author: Krzysztof Wozniak