Strategic Implication of IT

Information Technology initially used for automation, information and communication technology used for –
• Intra-Organization System
• Inter-Organization System
• Public Access Network

The use of IT and Communication Technology can have strategic implications for small and large organizations. The contribution of IT in business strategy for E-Commerce is defined as-

• It provides a new way to design the organization in the new structure.
• Create a new relationships between customers and suppliers.
• Enable the production and service through electronic data interchange.
• Change the basis of computation and industry structure.
• Contributes to the productivity and flexibility of knowledge workers.
• Provide the manager with electronic alternatives to face communication and supervision.

E-Commerce Strategy Inputs

Information Technology strategy becomes a central component in business strategy. The strategy input is categorized in three parts-

1. Technology
2. Business environment
3. Business capacity

Business Environment

1. Economy
2. State
3. Labour
4. Culture

Different types of Business Environment

• Internanl Environment
• External Environment

Internal environment

The internal environment includes all those factors which influence business and which are present within the business itself. These factors are usually under the control of the business. The study of internal factors is really important for the study of the internal environment.

Internal Environment Factors

These factors are-

1. Objectives of Business
2. Policies of Business
3. Production Capacity
4. Production Method
5. Management Information System
6. Participation in Management
7. Composition of Board of Directors
8. Managerial Attitude
9. Organizational Structure
10. Features of Human Resource

External Environment

External environment includes all those factors which influence business and exist outside the business. The business has no control over these factors. The information about these factors is important for the study of the external environment. Some of these factors are those with which a particular company has a very close relationship. However, some other factors influence the entire business community. A microenvironment means an environment that includes those factors with which business is closely related. These factors influence every industrial unit differently. These factors are as under

External Environment Factors

1. Customers
2. Suppliers
3. Competitors
4. Public
5. Marketing Intermediaries.

Business Capability

The introduction of e-commerce define, need new skill and altering the way of business is done. The organization needs to be sure that it can make a success of new sales channel and production capacity can respond promptly with the use of the electronic channel. The following are the business capability of e-commerce

• Improved Productivity
• Better Customer Service
• Opportunities for new business
• Cost-saving
• Transparency