Using IT as a Competitive Weapon

Using IT for Competitive Advantage became a hot topic in 1985 with the publication of Porter and Millar's article, "How Information Gives you Competitive Advantage" in the Harvard Business Review. Their article attracted senior level attention, prompting CEOs to ask their CIO, "How can we use IT to gain a competitive advantage?"

Systems that provide a competitive advantage critically differentiate a company from their competitors in the minds of their customers. These systems fall into the critical differentiators' quadrant from the nature of IT discussion. Systems that are critical differentiators are among the most exciting IT projects produced. Your group will present 1-3 case studies on such systems.

Contribution:	COMMODITY	DIFFERENTIATOR
CRITICAL	Critical Commodities	*** Critical Differentiators ***
USEFUL	Useful Commodities	Eliminate/Migrate

Examples of critical differentiators include:

• Celera's us of IT to reduce estimated time to map the human genome from 15 to 2 years!
• Mitek's distribution of laptops with roof design software to customers
• Howard Dean's use of the internet for hard money contributions
• American Airline's SABRE system
• Dell's direct order model facilitated by IT
• Cisco's use of IT to outsource and coordinate sales, manufacturing, and delivery
• Land's End use of IT to facilitate mass customization.

Please note that we are essentially talking about organizations in which their "core" business is typically non-IT. We are not looking at IT software companies, such as SAP or Microsoft.

Whichever systems you choose to study, be sure to include:

• Size of company in terms of sales and profits
• Major products the company sells
• General characteristics of their customers
• Organizational chart--who does the CIO report to?
• How many people work for the IT organization?
• What is the annual IT budget?
• Description of the critical differentiator: You must prove this application increased market share, revenues, profitability, etc.
• History of the system
• Was the system designed for competitive advantage or did it surprise the company?
• How do customers interact with the system?

Even though you are focusing on successes, your group should constantly stress that very few IT systems can be classified as critical differentiators. A 1994 article by Kettinger et. al. in MIS Quarterly only found 60 such systems, and very few of these remained critical differentiators for very long. Explain why it is so difficult to use IT to gain a sustainable competitive advantage. What are the key features of these successful systems? Can followers easily replicate them?

If you have other creative ideas, please feel free to discuss them with me.

Tip: Focus on systems that truly provide a competitive advantage. Again, for IT to provide a competitive advantage, the system must critically differentiate a company from their competitors in the minds of their customers . In the past some students have presented interesting IT systems which the customer doesn't interface with or know about...