Different IT for different companies
Research by the Politecnico di Torino leads to a better understanding of how the effects of Information Technology change according to different production organisations
Information Technology affects companies in different ways. This is a common observation in everyday production systems but it takes on different and more important meanings when validated by the scientific method. On the other hand, moving from the observation to the evidence that validates it allows corporate culture to evolve, taking in new elements and growing in a more solid and complete way. Danilo Pesce and Paolo Neirotti of the Department of Management of the Politecnico di Torino based their reasoning on the impact of IT on companies according to product and sector types, and came up with a new ‘sector taxonomy’, i.e. a different and more effective classification of the effects that IT has according to the sector to which the company belongs and the type of product it makes.
‘The impact of IT-business strategic alignment on firm performance: The evolving role of IT in industries’ – which recently appeared in Information & Management – seeks to extend the traditional analysis on the strategic role of IT (automation, information, transformation) by considering how IT is changing the nature of the product or service in particular industries. Applying a mathematical analysis model, the authors found that in industries where the product/service is digital in nature, the companies that achieve the highest economic returns are those where IT is used to support dual strategies based on the integration of cost leadership and differentiation. In contrast, in other industries – with the exception of those producing raw materials – the companies that achieve higher returns are those that use IT to support differentiation.
In other words, IT is different depending on who applies it. This means that the same technology or the same working method, obtains different results because it is conditioned by the reference sector of the company, the production processes, and the people who work there. The focus, then, is on production cultures, which are far more complicated than a simple flow chart or even a complex mathematical equation. Cultures that change, in fact, for each enterprise. And that must be properly understood. Even when technological innovation appears to be decisive. Complexities of the company that must be analysed carefully, a task for which Pesce and Neirotti’s research can provide valuable help.
The impact of IT–business strategic alignment on firm performance: The evolving role of IT in industries
Danilo Pesce, Paolo Neirotti
Information & Management, 60 2023
Research by the Politecnico di Torino leads to a better understanding of how the effects of Information Technology change according to different production organisations
Information Technology affects companies in different ways. This is a common observation in everyday production systems but it takes on different and more important meanings when validated by the scientific method. On the other hand, moving from the observation to the evidence that validates it allows corporate culture to evolve, taking in new elements and growing in a more solid and complete way. Danilo Pesce and Paolo Neirotti of the Department of Management of the Politecnico di Torino based their reasoning on the impact of IT on companies according to product and sector types, and came up with a new ‘sector taxonomy’, i.e. a different and more effective classification of the effects that IT has according to the sector to which the company belongs and the type of product it makes.
‘The impact of IT-business strategic alignment on firm performance: The evolving role of IT in industries’ – which recently appeared in Information & Management – seeks to extend the traditional analysis on the strategic role of IT (automation, information, transformation) by considering how IT is changing the nature of the product or service in particular industries. Applying a mathematical analysis model, the authors found that in industries where the product/service is digital in nature, the companies that achieve the highest economic returns are those where IT is used to support dual strategies based on the integration of cost leadership and differentiation. In contrast, in other industries – with the exception of those producing raw materials – the companies that achieve higher returns are those that use IT to support differentiation.
In other words, IT is different depending on who applies it. This means that the same technology or the same working method, obtains different results because it is conditioned by the reference sector of the company, the production processes, and the people who work there. The focus, then, is on production cultures, which are far more complicated than a simple flow chart or even a complex mathematical equation. Cultures that change, in fact, for each enterprise. And that must be properly understood. Even when technological innovation appears to be decisive. Complexities of the company that must be analysed carefully, a task for which Pesce and Neirotti’s research can provide valuable help.
The impact of IT–business strategic alignment on firm performance: The evolving role of IT in industries
Danilo Pesce, Paolo Neirotti
Information & Management, 60 2023