New technology concepts and applications

¶ … new technology -- The Internet -- and discuss the following concepts: Strategic thrusts, Strategic value of networks (if applicable), Stages of growth, IT strategy, Social and organizational changes (requirements and/or barriers), and Critical success factors.

Recently, one of travel agencies located at a rural area at Johnstown, Indiana decided to make the use of the Internet for handling the travel needs of its customers. Previously, the agency was connected with American Airline's reservation systems; however, this system was quite inflexible to meet the growing travel needs of the customers. Therefore, lately the agency has decided to use the Internet for meeting the travel demands of the customers. In the following I discuss the reasons for such a change.

Strategic Thrusts: The major strategic thrust for using the Internet technology was based on the agency's requirements for handling customers' various travel needs. In recent times, customers are demanding not only air travel bookings but also looking for the reservations of cars, hotels, and travel-guides to show them new places. Since the previous reservation systems as used by the agency could not meet these needs simultaneously, the agency had begun to use the Internet technology, since it can provide the flexibility and offer the capability of one-stop booking for airlines, cars, hotels, and travel-guides (Laudon and Laudon, 2000). In addition, the Internet provides the flexibility of comparing prices of several airlines, hotels, and travel guides. These comparisons are being used by the agency to provide the best deals for its customers. By bundling different services simultaneously, the agency is beginning to charge premium prices for its services and has also attracted new customers, who are looking for going on a vacation in resort on long-term sight seeing.

Strategic Value of Networks: Since the Internet use has become common in the United

States and other Western Countries, it is no surprise that the strategic value of the Internet has risen rapidly. There are several reasons for it. First, because almost all of the firms have begun to use the Internet for conducting their businesses -- order processing, payment scheduling, and order confirmation processing; only a few companies can expect not to take the advantages of the Internet technology.

One thing that is important in understanding the strategic value of the networks is that when more number of companies begins to use the Internet, the more flexibility and strategic value the Internet provides to the users (Turban, McLean, and Wetherbe, 2002).

In the travel agency's case, the agency will be able to gain more flexibility and value when it can connect to the Internet technologies of the other agencies such as-car booking, hotel reservations, and travel-guides. If it were not the case, the agency would not be able to provide the high level of services to its customers.

Stages of Growth: Internet technology for business purposes has gone through different stages. In the first stage, the Internet was used for merely displaying the advertisements of a company's products and services. In the second stage, the Internet was used for ordering the products and services, yet the payment had to be made through credit cards using a telephone service, because of the security holes in the Internet technology. In the recent and third stage, the Internet can be used for ordering the products, confirming the order delivery, and making the payment through the credit cards (Saloner and Spence, 2001). So, we believe that we are at the third stage of the Internet growth.

4) IT Strategy: IT strategy of the agency is to become a quality service provider. In order to achieve this goal, the agency is required to provide the convenience and flexibility to its customers. The use of the Internet technology is an excellent tool for meeting the various demands of the customers (Laudon and Laudon, 2000).

By offering the convenience of one-stop service, the agency has begun to charge premium prices for its services.

5) Social and organizational changes (requirements and/or barriers): Despite the fact that the agency decided to use the Internet technology for servicing its customers' travel needs, the transition of the agency in adopting the Internet technology was not smooth.

Some of the older travel agents who have been in the agency over 10 years were afraid of using the Internet and were not sure of the potential of the Internet. Also, they were not sure whether they would be able to use the Internet, as these agents were quite comfortable in using the proprietary system provided by the American Airlines.

However, once management decided to make the use of the Internet, management took adequate preparations in training people and showing them the potential of the Internet for the travel agency. Besides, the company offered several incentives to travel agents for rapidly moving toward the use of the Internet technology for meeting the customers' travel needs.