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All the chief executives around the globe, including their boards of directors together make complex investment decisions. They are involved in presenting products, building plants, and also signing off on multimillion-dollar acquisitions. Being meticulous investors, their decisions are based on solid results, which are backed by detailed financial analysis aimed at building shareholder value. With the growing number and scope of Information Technology, the same chief executives and the board of directors must deal with investments based on IT

I.T. projects, are involved in a range of work starting from fixing a bug to upgrading worldwide networks. It also includes the development of internet capabilities to order online products and services. But there is no doubt that these investment decisions are hard. These types of investments are often intricated by a heap of obstacles. For instance, some costs are hard to estimate, there may be or may not any materialize benefits and together all this contributes to a vital delivery risk. However, making smart investments in Information Technology can result in offering huge awards. Also, it is important for the CEOs to understand that to remain competitive they must involve themselves in making these investments.  

I.T. investments, not only serve to improve ongoing operations but also build capabilities. It is important to note that the stakes for I.T. are getting higher. C.E.O.s are realizing that maximum of their companies’ capability to accomplish competitive benefit hinges on bringing I.T. initiatives. To be precise, I.T., is more entwined with performing the company’s overall business strategy than ever before. All these have increased the urgency to construct capabilities based on I.T. 

Identifying the intensified role of I.T., a growing number of C.E.O.’s has placed their corporations to apply I.T. resulting in achieving competitive advantage at a much faster rate. 

Charles Schwab: This leader in the evolving online trading industry that provides low-commission, self-directed trading to the individual investor. Schwab builds a new channel for investors by developing Internet connections to its prevailing trading systems. Within two years, Schwab's online customer base has grown to more than 2 million users. 

Cisco Systems: This worldwide leader in networking solutions has a solar track record of financial performance, market presence, and continuous product invention. Cisco's growth has been accelerated by an advanced business model that integrates an aggressive acquisition strategy to attract and hold the best people. In parallel, Cisco's top urgencies include making strategic I.T. investments. In the last year, Cisco handled more than 64 percent of its orders and almost 70 percent of its customer inquiries. 

The Home Depot: The world's largest home-improvement retailer features a proven business model for fulfilment. It offers a huge collection of in-stock discount merchandise while keeping a knowledgeable staff on the floor at all times. This model is created on rapid inventory replacement, low operating costs, and outstanding customer service. The core element of Home Depot's strategy is to build these capabilities by making long-term investments in I.T. 

The challenge for the C.E.O.s in making decisions about I.T. involves the proper identification and recognition of a fundamental move of what I.T. can truly do for a company.

With the recent advancement in the internet, databases, and technologies, digital transformation, changing business environment, the range of I.T. opportunities and challenges are being transmuted. 

Competitive advantage in today’s business environment is undergoing a major transformation;-

  • Potential value delivered by I.T.:- Most corporations have accomplished significant E.R.P. software installations and network infrastructure projects as a major development to their internal I.T. operations.
  • Internet advancement affecting competitive positioning and business models:- The Internet has offered new openings and challenges for corporations to build competitive advantage.
  • Restructuring of outdated value chains:- The Internet delivers a low-cost, universal medium for suppliers to connect and join with customers. 

The chief executives and their board of directors, must realize how this modified business environment affects their capability to make successful investments in I.T. However, I.T. has become far greater than before, therefore, it is critical for the C.E.O.s to identify the opportunity granted by I.T.