TABLE 4 Redefining Economic Organizations: Applications of IT.
• Reduces cost and time in the supply chain
• Provides greater market coverage with primarily incremental operational cost increases
• Alters traditional scale economies, barriers to entry, and buyer/seller power
• Provides an effective way to add value
• Creates the basis for cooperative relationships with customers and suppliers
• Generates new organizational structures and governance models
veys show that while senior executives are aware of the growing role of technology, the real challenge for management is to find technology that is tightly integrated with business strategy and operation. The survey also showed that while 97 percent of these executives are convinced that technology will continue to have a very significant role, just over 70 percent believe that their primary focus will be designing and carrying out an e-business strategy. We see that e-business is driving a lot of restructuring, yet industries are participating at different rates and at different stages of evolution.
High-tech and computer electronics industries were the first to think about e-business, in large part because they helped create the environment and the technology that allows it to happen. The sectors that provide consumer goods and products will participate and reap real benefits much later. They have to learn how to adapt their brick-and-mortar environment where food is produced and grown, and they also have major concerns around channel disintermediation. The auto industry has begun its transformation, but its ability to restructure the supply chain across the supplier base and to push themselves out into the dealer network meets a whole host of challenges around quality assurance, supply, reliability of suppliers, and trust issues around domination of certain categories.
Within industries, early adopters tend to be very large organizations—companies that have offices in more than 11 different countries and sales greater than $10 billion. It is in such companies that senior directors have been able to create a vision of technology’s role in helping them change their industry. Around the globe the effects of the Internet are not yet ubiquitous. In the United States the survey shows that 78 percent of executives say technology is now beginning to change the way they do business. In Central and South America, by contrast, fewer than 28 percent of senior executives view technology as having an impact. This is because it is difficult to find skilled people, there is little common understanding of the meaning of a competitive business base, and it is difficult to raise capital for technology investments. He said that many large offshore companies and countries in Western Europe have operations in Central and South America