◦ 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

◦ IT Intensity◦ Accelerates the competiveness of the industry◦ Creates more winners and losers

◦ Digitized processes that improve an organization’s operations can be readily propagated throughout the organization

◦ However, windows of opportunity may be shorted (competitors can strike back) – turbulent environment

◦ 3 types of Competition◦ 1) Concentration

◦ a few companies have majority of the market share◦ 2) Turbulence

◦ leaders keep changing position◦ 3) Performance Spread

◦ wide performance range between leaders & laggards

◦ Research Questions◦ Has accelerated IT spending lead to economy-wide changes in the 3

measures of competition?◦ Are changes more pronounced in industries that are IT intensive?

◦ Study Supports these research questions◦ Do you agree?

◦ Does this paper support the idea of the “portfolio approach” (Weill and Aral)?

◦ How do the assertions of this paper support or contradict “IT doesn’t Matter” (Carr)?