This chapter will show you that it is important that you view information systems as more than a set of technologies that support efficient business operations, workgroup and enterprise collaboration, or effective business decision making. Information technology can change the way businesses compete. So you should also view information systems strategically, that is, as vital competitive networks, as a means of organizational renewal, and as a necessary investment in technologies that help a company adopt strategies and business processes that enable it to reengineer or reinvent itself in order to survive and succeed in today’s dynamic business environment. Section I of this chapter introduces fundamental competitive strategy concepts that underlie the strategic use of information systems. Section II then discusses several major strategic applications of information technology used by many companies today.

There are many ways that organizations may view and use information technology. For example, companies may choose to use information systems strategically, or they may be content to use IT to support efficient everyday operations. But if a company emphasized strategic business uses of information technology, its management would view IT as a major competitive differentiator. It would then devise business strategies that would use IT to develop products, services, and capabilities that would give the company major advantages in the markets in which it competes. In this section, we will provide many examples of such strategic business applications of information technology.