Information Technology as a Strategic Alternative

IT is emerging as a critical means of putting strategy into action. IT distributes processes and analyzes information. Information technology can be divided into three components: software, data, and infrastructure. Infrastructure supports the technology architecture and consists of hardware, memory, and communications equipment. Data is the actual information that includes everything from client contact information to the procedures by which a business is run. Software links the infrastructure and the data together to use information. IT can improve cash flow and consequently value through enhancing revenue (making Internet sales), gaining competitive intelligence (capturing customer information), and improving operational efficiency (automating manual processes). The risks of IT include lack of adoption, inexperience with technology, and obsolescence. The majority of IT initiatives have an impact on how work is done and require changes to business processes. Hence, IT projects also have the same risks as business process reengineering, which we will discuss next.