Role of IT in Business Ecosystems by Hyeyoung Kim, Jae-Nam Lee, and Jaemin Han.
I
found this article to be interesting. As most know, the economy is dependent on
how companies, governments and other entities react with each other. This
article presents a theory that provides a greater perspective of how businesses
are connected in an ecosystem and how IT has made the ecosystem more tightly
woven. The authors go into depth of how IT can be used by a company.
The Business Ecosystem
A
business relies on its suppliers and the purchasing power of their retailers or
customers. Also it is important that a business is able to outperform their
competitors in order to keep an advantage (I mean outperform in a general sense,
higher volume or better quality, etc.). The authors explain that the business
ecosystem is more complex than that. With just a little bit of explaining it
makes perfect sense how this is true. A business ecosystem is actually
dependent on the wellbeing of all entities in the system, even the competitors.
“Contributors band
together for a common cause even though they have different interests. This
suggests that companies are predisposed to comprehend correct directions and
that they work together in a complex business web” (Kim, Lee, and Han, 151).
For
example, take a new small business that sells a new product that is not
necessary to customers, it will not have the market it needs, even if they
advertised as much as they could afford. But if there were many businesses
selling similar products, the combined advertising efforts could be substantial
enough to create a market for the item. Therefore the small business would be
dependent on the wellbeing of its competitors in order to create a market for
their product. The article goes more in depth to explain the “keystone” and “flagship”
ecosystem model and some of the strategies involved.
The Role of IT
The
article focuses on how IT is important due to its ability to manage
informational capital. Also each industry has very different characteristics and
needs from one another. Figure 2 and 3 in the article very simply illustrate
this. Based on the needs and characteristics of the industry, IT is applied
differently to help support the business ecosystem. The authors illustrate strategies
that companies may use in order to use their position to their advantage using
IT. Companies can use the flow of data to manipulate the ecosystem by gathering
and analyzing, or by sharing and withholding data. According to the article,
modern IT has created a system where data is key, and the company in control of
the most and best data has the power.
Work Cited
Kim, Hyeyoung, Jae-Nam Lee, and Jaemin Han. "The Role of IT in Business Ecosystems." Communications of the ACM 53.5 (2010): 151-56. Academic Search Complete. Web. 23 June 2012. <http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=50281791&site=ehost-live>.
Travis, this article seems very interesting. I think that information capital is one of the most important assets any business can have. If a company uses IT to manage its information capital properly, it can improve its competitive edge and add value for its stakeholders. Of course, doing this has to go along with the main strategy of the company. I think it needs to involve all departments and employees working closely with each other and with suppliers, any partners, and with customers. IT can be used to determine any changes in the industry,or maybe to help identify the next big thing or opportunity that could help the company grow. Good article!
ReplyDeleteThis was a good blog on an interesting article. Ehric has made some excellent points with the first comment as well, especially about working closely with business partners, employees, suppliers, and especially customers. Technology is advancing so fast that this is an area every company should be aware of, and should really work hard to develop some sort of competitve advantage through IT. I also liked how you pointed to the fact that many business require their competitors to be successful in order to be successful themselves. I think another good example would be the automotive industry a few years ago, and also the airline industry. Sharing information could have been very beneficial to these companies, and it may have even saved some of those companies from folding.
ReplyDeleteI agree with the previous posts, this was indeed interesting. I've been seeing increasing amounts of articles concerning the importance of data management. It is one of the areas I try to keep up with; the privacy side of it anyway. The data industry seems pretty lucrative if you are able to manipulate it in ways that produce value or provide a means to better manage a company.
ReplyDeleteI do wonder what some of these companies are doing with the VAST amount of data they are storing; primarily the data on consumers. Google (and other online companies) are storing tons of data on consumers and their reasoning doesn't seem to fit in my opinion. Google has been caught already in malicious data capturing and then denied it.