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What is the competitive forces model for IT infrastructure?
The competitive forces model for IT infrastructure determines what proportion to spend on infrastructure and where to apply strategic infrastructure investments, establishing new infrastructure initiatives with small experimental projects, and establishing the entire cost of ownership of data technology assets.
This model consists of six components, as shown in the figure. Let’s see, with our previous example, how Emerald uses this model.
Internal Factors
- Market Demand for your Firm’s
- Your Firm’s Business Strategy
- Your Firm’s Information Technology (IT) Strategy, Infrastructure, and Cost
- Information Technology
External factors
- Competitor Firms’ IT Services
- Competitor Firm IT Infrastructure Investments
1. Market Demand for your Firm’s
The current services and products provided by Emerald to their customers, suppliers, and employees were obtained by applying different methods to gather information, such as conducting surveys to several groups, interviewing executive-level employees, observation, and document review. All three parties should be satisfied to the level necessary to maintain market demand for the firm.
2. Your Firm’s Business Strategy
In Emerald’s last five years of business strategy, in 2016, Emerald was certified ISO 9001:2015 as the only Sri Lankan clothing brand.
The process of making apparel is highly controlled and monitored, from choosing fabrics that are of the very best quality since the raw materials are imported from Japan to being concerned about everything in detail to gain the attention of the consumers and maintain their reputation to cooperate.
Earlier, Emerald targeted customers who could afford the highest price range, but at present, Emerald consists of different brands to catch up with all levels of consumers, such as Emerald Basic, Emerald Corporate, Leonardo, Emerald Fashion, , Class One, Flax Farmer, Leger (lightweight cotton), Focuss, Runn, Mansak, eEpoch.
3. Your Firm’s Information Technology (IT) Strategy, Infrastructure, and Cost
This component states that to achieve a sustainable outcome, the firm’s plans for the information technology to be introduced over the next five years, along with their collaboration with the firm’s business plans, should incorporate a budget for the cost of the current IT infrastructure, a total cost of ownership analysis, and the cost of launching the new IT strategy.
4. Information Technology
Emerald uses information technology to maximize their profit by maintaining their reputation. Emerald has used the ERP system, CRM system, HRM system, and inventory control system to maintain processes, web technologies, and social media to market their products. Emerald’s uses reliable IT technologies that are often used and affordable.
5. Competitor Firms’ IT Services
The company benchmarks the quality rate against those of Emerald’s peers for consumers, suppliers, and staff to establish quantitative and qualitative service metrics for the business and organization’s rivals and attempt to determine what resources clients, vendors, and employees offer. Apart from that, compare and contrast the competitor’s IT firms and the differences by comparing and contrasting Emerald’s IT infrastructure, and make a plan to overcome them.
6. Competitor Firm IT Infrastructure Investments
Evaluate the IT infrastructure expenses against Emerald’s competitors. Although some companies consider their IT spending a competitive secret, information on the IT investments of public companies can be found in their SEC Form 10-K annual reports to the federal government when these expenditures affect the financial results of a company. Many businesses are quite public about their creative expenditures.
Conclusion
In summary, this article highlights the importance of making smart IT investments to ensure a company’s success. By looking at market demand, aligning with the business strategy, and planning IT investments carefully, firms like Emerald can thrive. Emerald has used technology like ERP, CRM, and others effectively to boost profits and maintain a good reputation. Learning from competitors and understanding their IT investments is also crucial to stay competitive. In the end, smart IT decisions can make a big difference in the success of companies like Emerald in today’s business world.
