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Develop Long-Term Competitiveness through IT Assets

October 15, 1996 | Jeanne W. Ross, Cynthia Mathis Beath , Dale L. Goodhue | Managing Technology

How can firms enhance their competitiveness through information technology? After studying IT management practices in various companies, the authors identify three assets that they see as most important to becoming and staying competitive. The human asset is an IT staff that consistently solves business problems and addresses business opportunities through information technology. IT professionals need up-to-date technical skills; an understanding of the business, which comes from client interaction; and the ability to solve problems. The technology asset -- sharable technical platforms and databases -- is essential to integrating systems and making IT applications cost effective. Firms must specify what kinds of data to share, how to store them, where to locate servers, and how to support applications and technologies. They must also establish standards that limit the range of technologies that the IT staff must support. The relationship asset implies the risk and responsibility for effectively applying IT that business and IT must share. Top management must be involved in establishing IT priorities and forming steering committees that set the tone for a cooperative IT-business relationship. Ross et al. discuss the interdependencies among the three assets, using many examples from their study. They suggest that IT and business executives should constantly assess the status of the IT assets in their firms by using the questionnaire provided. Next they should identify an action plan based on their position -- sinking, drifting, luffing, and cruising -- in relation to the competition. A firm's asset base needs to be carefully balanced; building and leveraging IT assets, according to the authors, is an organizationwide responsibility.

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