Gaining a strategic advantage over competitors requires innovative use of information technology. For example, a multinational bank has recently launched a service known as “Drive”, in which they have given their customers the luxury of buying cars on credit. Some of the most distinguished characteristics of this service are online submission and processing of applications, selection of the installment plan by the customer, selection of the insurance plan, round the clock inquiry services etc. Thus, strategic information systems can help provide strategic products and services that give a business organization a comparative advantage over its competitors.
Impact of IT on organizational structures:
In recent times, technology has evolved into an ever increasing phenomenon in the workplace and it is amongst the most talked about subjects in the business world. More and more businesses, large and small, are trying to incorporate the latest technology into their operations. The appeal of the whole information technology arena is that it is designed to make people and organizations more knowledgeable, efficient, and/or profitable. A key advantage of information systems is to be able to simplify organizational structures. For many years it has been argued that IT will enable larger spans of control and the flattening of group ware. However, caution needs to be exercised. As delayering is not right for every organization and should not be done indiscriminately. Research on whether IT encourages centralization or decentralizations produced ambivalent results. Many companies have centralized operations (for efficiency) while at the same time decentralizing their activities. It now seems clear that IT enables a greater variety of structures. In particular it enables more flexible and fluid structures –networked structures, dispersed team and teams that come and go as needs change (as in the virtual organization).