• Unit 1: Information Technology and Competitive Advantage

    Organizations have been using information technology for the past 50-plus years. Billions of dollars have been spent on computer hardware, software, network communications, and all the other requirements of having world-class technology. But to what end? Has the money spent on technology allowed businesses to become more profitable? Or more specifically: has the implementation of information technology led to a sustainable competitive advantage?

    This unit will start by answering the question: What is information technology? For that matter, what exactly is technology? For our purposes here, technology is considered any electronic or digital tool used by people to make a process easier or more efficient. You can also think of technology as the science of creating or using technical objects in order to reach industrial goals, which certainly applies to how businesses use technology to achieve productivity. We tend to think of technology mostly in terms of electronic innovation. Information technology is defined as those digital or electronic tools that are designed to make the process of managing or distribution of information easier.

    You will then study the history of IT and how it fits into business strategy today. Specifically, you will review concepts from other courses, such as the value chain and Porter's Five Forces of Competitive Advantage. You will look at how IT fits into these topics and other key concepts related to strategy.

    This unit will end with a focus on the relationship between IT and competitive advantage, which will set the foundation for the rest of the course. Is it possible for IT to bring competitive advantage? Many argue that YES, it can! As a student of information systems, it is highly important that you can articulate both Carr's article AND the rebuttals to it. The articles below present different cases for how IT can bring a competitive advantage. See if you can find a common thread in these articles.

    Completing this unit should take you approximately 10 hours.

    • Upon successful completion of this unit, you will be able to:

      • explain the effective use of information technology in business organizations;
      • summarize key concepts of an information systems strategy;
      • explain the concept of sustained competitive advantage; and
      • describe how information systems strategy can play a part in achieving a sustained competitive advantage.

    • 1.1: Understanding Information Technology

        • 1.1.1: Information Technology vs. Information Systems

          • Achieving Efficiency and Effectiveness through Systems URL

            Read Chapter 2 to learn about the four components of information systems and what role information technology plays in business. Read the two case studies on pages 33 and 34 and answer the two questions that accompany each case to apply what you have read.

        • 1.1.2: Strategic Growth of Information Systems

        • 1.1.3: Information Systems Strategy

          • Performance Through Time URL

            Read this chapter until you get to the heading "1.4 Diagnosing Performance", then stop. As you read through the first three sections, think about how many technology delivery tools have changed in your lifetime. Consider the author's claim that management does matter. As the competitive landscape and the technology change rapidly, consider how a business can use strategy to take a proactive approach toward strategic growth.

          • Creating Winning IT Strategies Page

            As you listen to this video, think about the day to day operations of an organization. We will talk about the demand side of the business in terms of competitive advantage. We will then discuss the control side by discussing the enterprise systems and processes that drive the information systems strategy. Finally, we will discuss the supply of the system by talking about how to manage our data and interact with our customers.

        • 1.1.4: Roles of IT in a Firm

          • Introduction to Information Systems URL

            Read Chapter 1. In this chapter, you will learn about three primary roles that information systems serve in business organizations: enterprise systems, e-business, and information technology. Chapter 1 likens information systems to puzzle pieces that keep changing. Do you think that is a worthwhile comparison? Take a minute to write why you agree or disagree. If you disagree, come up with another analogy.

      • 1.2: What Is Competitive Advantage?

          • 1.2.1: Sustainable Competitive Advantage

            • Introduction to Competitive Advantage URL
              Read this section for an understanding of competitive advantage and the role technology can play in sustaining competitive advantage. Complete the exercises at the end of this section. Also, answer the following questions in your notes: What is strategic positioning? How might technology be used to achieve strategic positioning?

          • 1.2.2: Five Forces of Competitive Advantage

            • The Five Forces of Industry Competitive Advantage URL

              Read this section to see examples of how technology can influence the five forces of competitive advantage. Consider the questions and exercises at the end of this reading to explore how this model is used for developing business strategy.

            • Business-to-Business Marketing Models URL

              This reading offers a very clear and simple explanation of the Five Forces Model. Think about a business you visit regularly, such as a grocery store or online store. Then try to briefly describe the rivalries, threat of substitutes, buyer power, barriers to entry, and supplier power for the business you have chosen.

          • 1.2.3: Value Chain

            • The Value Chain URL

              Read this section to gain insight into how technology can affect the value chain. Consider each question at the end of the reading to reinforce your understanding of this model.

            • The Marketing Model URL

              The value chain proposes that if a business makes a product that meets the customers needs and wants and then sells it at the right time and the right price, the customer will purchase the product. Reflect on some instances in which the customer may still choose not to buy the product, even if the theory of the value chain is applied fully.

        • 1.3: Using Information Systems to Create a Strategic Competitive Advantage

          • Achieving Competitive Advantage with Information Systems Page

            This article ties together the concepts of information systems and competitive advantage. Take note of the several examples given of how information systems support business processes. Can you think of additional ways that information technologies are used to help business every day? Review the quiz questions at the end of the reading.

          • Introduction to Competitive Advantage in Information Systems URL

            As you complete this reading, think about how using, protecting, and managing information and data could support an organization's competitive advantage. How does understanding customer information and data support current operations? How might it impact future operations? 


        • 1.4: Cases in Competitive Advantage: Zara and Netflix

          • Zara: Fast Fashion from Savvy Systems URL

            Read this chapter to see an example of how IT is used to gain a competitive advantage. How did Zara use data to make decisions about their business operations? How did Zara's use of data compare to Gap's?

          • Netflix: David Becomes Goliath URL

            Read this chapter to see an example of how IT is used to gain a competitive advantage. As you read the case of Netflix, consider the following question: What are the long-term threats to Netflix? (Hint: Consider changes in technology and copyright/patent/media law.)

        • Unit 1 Assessment

          • Unit 1 Assessment Quiz
            Receive a grade

            Take this assessment to see how well you understood this unit.

            • This assessment does not count towards your grade. It is just for practice!
            • You will see the correct answers when you submit your answers. Use this to help you study for the final exam!
            • You can take this assessment as many times as you want, whenever you want.