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Part - IX

Intel follows a policy of Derivative Innovation to get maximum benefit out of intangibles associated with IT. This process involves finding and creating incremental value through the reuse of existing assets. This approach can take many forms; recycling consumable materials, consolidating infrastructure for capital avoidance, redeploying spent or underutilized capital equipment or software, licensing or sale of intellectual property, project cost recovery through consulting fees, reselling internal solutions, and other creative exploitation.

Conclusion

To remain competitive in the market, businesses today are forced to invest in Information Technology (IT). Advances in IT have enabled new competitors to enter existing markets readily and gain crucial first-mover advantages. IT has given an entirely new dimension to the paradigm of globalization enabling companies to become global yet remain local at the same time. We believe that information technology can be strategic to many firms. In fact, information technology is now likely to be essential to the delivery of any new strategic effort - in manufacturing, distribution, sales, or service.

The strategic impact of information systems poses a new problem for MIS management. Finding and evaluating strategic opportunities to use information technology, and then justifying the decision to make the necessary investment all require a set of skills different from those historically required of IS executives. The decision to proceed with or to cancel a strategic program is often difficult. Part of the problem comes from viewing even strategic opportunities to invest in technology as projects, to be judged on their expected value, and included or excluded from the company's portfolio on capital budgeting criteria, rather than on the value they help create in the business. Sometimes these opportunities may be too critical to be treated in this way: the future benefits are too wide ranging to be estimated with any accuracy; or the implications of failure to invest in the technology may involve permanent loss of competitive strength within the industry. Additionally, some information systems ventures can, if successful, so radically alter the operating environment of the firm that precise predictions for quantitative analysis are impossible to obtain, making these programs especially difficult to evaluate.

Concluded.

* Contributed by -
Mrugendra Shintre,
Manoj Kumar Gaddam,
II Year,
IIM Lucknow.