Achieving Competitive Advantage with Information Systems

Some firms nowadays use information systems to achieve their competitive advantage. There are five competitive forces shape fate of firm:

  1. Traditional competitors
  2. New market entrants
  3. Substitute products and services
  4. Customers
  5. Suppliers

From that five competitive forces shape, that’s why some firms use information systems to help produce more of their products and their services could be more advantage to use by the customers. Align IT with business objectives is one of the basic strategy to achieve competitive strategy because if we not align IT with business objectives, 75% of businesses fail to align their IT with their business objectives. There are some way to align IT with business objectives: identify business goals and strategies, break strategic goals into concrete activities and processes, measure actual performance and determine how IT can help achieve business goals. There are four generic strategies for dealing with competitive force enable by using IT: low-cost leadership, product differentiation, focus on market niche and strengthen customer and supplier intimacy.

The internet and globalization are also useful on helping businesses compete globally because internet competing globally was only an option for huge firms able to afford factories, warehouses, and distribution centers abroad and internet drastically reduces costs of operating globally. From the globalization sides, there are some benefits too, like: scale economies and resources cost reduction, lower cost per unit of production, higher utilization rates and speeding time to market. There are four global system configuration: centralized systems, duplicated systems, decentralized systems and networked systems. Quality and design help to improve businesses compete in information systems.

There are some ways information systems that improve quality:

  • Improve design quality and precision.
  • Reduce cycle time and simplify production process.
  • Use customer demands to improve products and services.
  • Improve production precision and tighten production tolerance.


Oleh: Annisa Ardiningrum & Gunawan Wang