Importance of Information tech for Businesses
Information technology has a powerful effect on competitive advantage in a company. This comes in the form of either differentiation or cost. Information technology does this by allowing organizations to gain the competitive advantage by taking advantage of changes in the company's competitiveness or affecting value activities themselves. Therefore, if you are looking for an IT Company Worcester to help your company gain competitive advantage, here are some of the benefits that you will gain from this move.
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Enhancing differentiation
One of the ways which information technology can give you the competitive advantage is through enhancing differentiation. The key to determining differentiation in any business is the role of the company and how it packages its products to satisfy the customers' needs. With information technology, it is possible for a company to customize its products according to specific client needs. This is a big improvement from the olden days where it would take time and a lot of resources to understand exactly what a certain market niche prefers and what will sell there. Information technology, therefore, increases accuracy and dramatically reduces the time required to handle each order.
Lowering cost
Information technology can also lower a company's operating costs, therefore, increasing its competitiveness. In the past, the impact of technology on cost was limited to activities that required repetitive processing of a product or information. But these limitations do not exist any longer. Activities such as assembly that required a lot of manpower now have a component for information processing.
On top of directly affecting cost, information technology also plays a role in altering the factors that drive cost in activities. It does this in a way that can erode or improve a firm's relative cost position. For instance, if a company takes five of its salespeople off the road and makes them into telemarketers, they will have substantially reduced the sales expenses and increased their sales volume. This is because their advertisements will reach far more people in a short period of time than if they were on the road.
Changing competitive scope
Information technology has the ability to change the relationship between competitive advantage and competitive scope. With technology, a company is able to coordinate its activities in regions that it operates. It has the ability to unlock the benefits that come with operating in broader geographic scope. This will help your company create competitive advantage.
The revolution in information technology has had some unforeseen outcomes. For instance, it has created interrelationships between industries that were previously not separate. A good example of this is the merging of telecommunications and computer technologies. For instance, telecommunications companies such as ATT are taking advantage of this interrelationship to enter into the computer industry. On the other hand, Rolm, which is a manufacturer of telecommunications equipment, was acquired by IBM. The obvious intention of IBM as seen from this move is that it intends to join the telecommunications equipment manufacturing industry.
As integrated communication and IT systems continue to improve and spread, the competitive advantages that come with it will only increase. It is, therefore, important that you incorporate information technology and utilize it fully in your firm to enjoy all its benefits.