Specifically the use of information technology can be used to streamline communications, enforce business rules, manage knowledge, etc. It can either make existing processes more efficient or enable processes that hitherto were impossible if attempted manually or with archaic technology. The scope of enablement includes internal functional areas as well as the external value chain comprised of vendors and customers. In general, Functions it can help in Permitting communication between value chain activities that could not take place otherwise Making communication situations between value chain activities more effective
Eliminating unnecessary person-to-person communication by making information available through the web or other computerized means
Making communication systematic between the value chain to minimize wasted effort and confusion. For example, it can help in outbound logistics through point-of-sale: (POS) that allows a system that uses barcodes to generate customer bills. Many supermarkets now give their repeat customers an ID card. Using ID cards in conjunction with POS systems provides an extra benefit, namely a history of every item the repeat customer purchased. It can help in direct marketing that helps in the process of selling through communications addressed to specific customers who are likely to be interested in the product. Similarly, it can help in sales force automation that helps in data handling and data retrieval tasks related to sales business. Beyond, it can help in increasing the customer interactions such as service calls, website activity etc.
Conclusions
With growing capabilities, along with reduced cost, of information systems, it has become the cornerstone for increasing the effectiveness and efficiency...
It not only supports a business strategy but also reshapes business strategy to leverage the potential of it. This dynamic link requires continual review and readjustment for understanding the critical role of the it in the value chain.
By using corporate it, several firms try to maximize their interactions with customers through feedback, e-mail, and other personalized services. The information so collected can be used to provide products and services that can easily be customized to individual needs. For example, banks and insurance firms have increased the portfolios of their products and services, besides to develop and sell new products.
In sum, the core of the corporate it lies in its capacity to link and integrate activities across the whole value chain. To have a sustainable advantage, a corporation has to integrate across many activities to create a unique positioning involving trade-offs with rivals.
As new it emerges, its potential impact is likely to differ substantially across industries. For instance, it that enhances interactions in the value chain might have a large influence in the pharmaceutical industry where it could enable delivery of customized drug combinations to specific patients. In situations where it innovations may add substantially to industry value, the effect on firm value of investments in it may be many times greater than the actual cost of implementing the new it by firms in the industry.
References
Porter, M. (1985). Competitive advantage. Free Press, New York.
Weill, P. (1992). The relationship between investment in information technology and firm performance: a study of the valve manufacturing sector. Information Systems Research, pp. 307-333.
