Use the Right ERP Applications and IT to Power Up Your Competitive Strategy

How well do your ERP and information technology decisions relate to your company's competitive strategy? What can you do to ensure all are working in tandem?

I'd like to offer several examples of basic competitive strategies that can be given added oomph via ERP applications and information technology.

Organizational strategy defines the broad directions and approaches an organization is taking or will take in carrying out its mission.  Information systems and information technology for ERP applications are important to strategy because they can affect what an organization does, how it operates, how it interacts with customers, and its competitive position.  The terms information technology and information systems are often used interchangeably, although information technology generally refers to the use of technology in a firm's products and services, whereas information systems refer to business systems that include people, data, and procedures as well as technology.   For example, implementation of organizational strategy often involves the design of new business systems or the redesign of old ones.  Information technology is important to these efforts, since it can be incorporated into a broad range of business processes.

Consideration of ERP systems and information technology can shape changes in strategic thinking about how to do business, how to interact with customers, how to support supply chain coordination, and how to achieve sustainable competitive advantages.  What follows are several examples of the basic competitive strategies and sustainable competitive advantages.

The basic competitive strategies apply to firms that aggressively pursue leading-edge innovations as well as firms that employ a more conservative approach in using proven solutions for ERP applications and information technology.  The proven solutions often reflect out-of-the-box functionality within an ERP software package, where the functionality supports most of the distinctive business practices within the firm.   Examples ...