IT can be used strategically to develop capabilities that support an enterprise's competitive position by confronting five competitive forces. IT plays a major role in reengineering business processes to dramatically increase efficiency. Key technologies like intranets and data mining are used to gather and distribute organizational knowledge. Investments in IT can result in new products, services, and processes that create opportunities to enter new markets and form new business alliances.

1. Strategic impact
of IT in
Network Economy

2. IT, Strategy & Strategic impacts
• The strategic role of IT involves using IT to develop products,
services, and capabilities that support or shape the competitive position
and strategies of an enterprise to confront five competitive forces.
(Porter’s Model) that shape the structure of competition in its industry.
• Consequently impacts related to implementation of strategies come
to light, which are the strategic impacts.

3. supports
Is a response to
competition

4. IT and its Strategic impacts
• Information technology plays a major role in reengineering business processes.
The speed, information processing power, and ease-of-use of modern computer
hardware, software, and networks can dramatically increase the efficiency of business
processes, and communications and collaboration among the people responsible for their
operation and management.
• Internet and intranet web sites, groupware, data mining, knowledge bases,
discussion forums, and videoconferencing are some of the key information technologies
for gathering, storing, and distributing knowledge. (organizational learning and business
know-how)
• Focus on improving efficiency and lowering costs by using the Internet and the World
Wide Web as a fast, low cost way to communicate with customers, suppliers, and
business partners

5. IT and its Strategic impacts
• Investments in information systems technology can result in the development of new
products, services, and processes. This can:
• Create new business opportunities
• Enable a firm to enter new markets
• Enable a firm to enter into new market segments of existing markets.
• Telecommunications networks electronically link the terminals and computers of
businesses with their customers and suppliers, resulting in new business alliances
.