The trend today is for increased information technology management in corporate strategies. This is a sign of the importance companies now place on the role of information technology in corporate success. Originally, information technology was seen as a way to save money. At first information technology was used to improve productivity by automating processes and improving work flow. Companies then began using information systems to improve cash flow and maximize return on investment. This had the effect of improving profitability by lowering the cost of business (McNurlin & Sprague, 2006).
The next phase of information technology involvement in corporate success began when information systems move from saving money to making money. The first step in this process was to use information technology to gain a competitive advantage. The successes of Dell and Walmart's supply chain management are examples of information technology helping a company gain a competitive advantage. Executives then began using information systems to access real-time information and increase the company's responsiveness to external elements. Finally, information systems have given customers unprecedented access to the company. Methods such as email and online chat allow customers to interact with company representatives with very little interference. This level of access is so groundbreaking, companies have found it necessary to implement these systems in order to remain competitive (McNurlin & Sprague, 2006).
Once the company begins using information technology to make money, it becomes a vital part of the corporate strategy. Not only must the company implement an effective information technology strategy in order to make money, it may be required just to survive. Additionally, the desire to gain a competitive advantage through the misuse of information technology is too great to allow senior management to simply ignore it. Therefore, executives must involve themselves as a driving force in information technology strategy (McNurlin & Sprague, 2006).
Harrah's Entertainment is one company that has recently used information technology to improve the company's performance. The company used information systems to track customer spending in their casinos. Once this data was gathered, Harrah's learned that customer service plays a key role in increasing their profits. Customers that were satisfied with the customer service at Harrah's typically spent 10 percent more than others. Extremely satisfied customers spent 24 percent more. Harrah's was able to use this information to guide their corporate strategy in several key areas including staffing and marketing (Coulter, 2010).
Coulter, M. (2010). Strategic management in action (5th ed.). Upper Saddle River, NJ: Pearson.
McNurlin, B. C. & Sprague, Jr., R. H. (2006). Information systems management in practice (7th ed.). Upper Saddle River, NJ: Pearson.