'MIS' class

2011-10-05T15:12:00.000+08:00

For yesterday class, we assigned a new task by Dr Yap to come out with a proposal to Chief Information Officer of any company to go green on business operation as an initiative of corporate social responsibility.

IT Is a Commodity That Does Not Offer a Competitive Distinction And Therefore Does Not Provide a Competitive Advantage Assertion Review

2011-10-05T14:24:00.000+08:00

In common practice, as AirAsia widely use of technology in its name positioning and marketing efforts, the airline able to sell the highest number of seats online via social media channels. Other than transportation, information technology (IT) spending is also happens in banking, telecommunications and manufacturing. “Government around the globe is intent on creating intelligent cities while enhancing services and agility to better serve the citizens. Take Malaysia initiative of implement of e-government portal under the control of Multimedia Super Corridor (MSC).

Take for example, nowadays, every student have laptop on their table. They use the laptop for same purpose which some of them will use laptop for social networking (Facebook, Renren, Frienster, etc.), some for do research, read news on the web, for personal entertainment and so on. Mostly, the benefit of their habit of using technology will only bring to certain level of outcome. Every person has at least one laptop, and this does not mean it makes no different for who has it and for each of the outcome is unique. From positive side, they will use it for self development and doing assignment, at the end they will graduate from university and also make themselves become a better person. And so it is hard to distinguish from each others.

Same goes to business field, some companies will gain and some others will lose from if IT becomes commodity. Not all parties in technology industry are affected. Some are gaining from it, such as Apple because it has opportunity to steal market share from commodity original equipment manufacturer (OEMs) and also Red Hat and other open source companies that find ways to gain profit from the commodization of both hardware and software[1]. Companies that will impacted from the IT commodization such as Intel and Advanced Micro Devices (AMD) are microprocessor OEMs that may affected as margins for PCs decrease and PC OEMs will likely continue to put pressure on microprocessor to reduce prices[2].

Many scholars oppose and challenged to the Carr’s categorical assertion. Information technology has not reach the stage of competitive advantage. Competitive advantage is not achieved by acquire the IT product and services. It needs to be integral with business value chain. It is result of management style of a firm which brings value of improvement such as cost leadership. Thus, IT is not a competitive advantage enabler. IT enables the management innovations of competitive advantage. So, ubiquitous spending on IT and profitability are unrelated.

[1] Dignan, L. (2011, March 7), HP's way forward? Commoditize software, buy Red Hat, retrieved from http://www.zdnet.com/blog/btl/hps-way-forward-commoditize-software-buy-red-hat/45749

[2] Saqib Iqbal Ahmed (2011, Jun 10), AMD's new chips could force Intel to cut prices, retrieved from http://www.reuters.com/article/2011/06/10/us-intel-research-macquarie-idUSTRE7593I120110610

INFORMATION TECHNOLOGY 2.0

'MIS' class

IT Is a Commodity That Does Not Offer a Competitive Distinction And Therefore Does Not Provide a Competitive Advantage Assertion Review