◦ Competitive Advantage (CA) requires the following
characteristics:
◦ Rare
◦ Valuable
◦ Inimitable
◦ Grounded in the “Resource Based View” RBV of the Firm
◦ CA depends on the context
◦ Firm Resources can only provide a CA for a limited time.
◦ CA can only be sustainable for a certain period of time
◦ Firms need to capitalize on the window of opportunity
◦ The degree of sustainability defines the extent to which a
CA exists
◦ “Best practices are built into software and replicated”
◦ “IT-transformations have all happened”
◦ “IT’s power is outstripping most of the business needs
it fulfills”
◦ Ubiquity makes IT irrelevant
◦ Comparison between electricity and IT
◦ “There is no consistent correlation with IT spending and Firm
Performance”
◦ Does this assertion support Carr’s basic argument or contradict it?
◦ No idea what he doesn’t know
◦ Pretended to know what he didn’t
◦ Made up fuzzy logic
◦ Portfolio Approach
◦ Successful IT portfolio techniques change the
conversation from technical to strategic considerations
by applying a commercial lens to IT investments
◦ The result is an allocation of IT assets that is appropriate
for the company's circumstances.
◦ Underscores the importance of how organizations use
technology (rather than focusing on the technology)
◦ 4 Asset Classes
◦ Infrastructure
◦ hardware (often shared by multiple applications)
◦ Transactional
◦ cut costs and increase throughput (brokerage firm’s trading
system
◦ Informational
◦ accounting, reporting, business intelligence
◦ Strategic
◦ designed for competitive advantage (enter new markets or
develop, services, processes)
◦ 4 Asset Classes
◦ Informational (17%) / Strategic (11%)
◦ Transactional (26%)
◦ Infrastructure (46%)
◦ Each Asset Class is linked to different types of Business Value
◦ Differences in specific industries are striking
◦ Financial Services:
◦ IT is mature
◦ Infrastructure/Transaction IT boosts innovation via improved efficiency
◦ Retail and Transport Industries
◦ Portfolios weight more heavily on informational assets
◦ Advantage resides in the effective use of information
◦ IT Savvy
◦ Practices (Use)
◦ IT for Internal and External Communication
◦ Internet Use
◦ Digital Transactions
◦ Competencies
◦ Companywide IT Skills
◦ Top Management Involvement