Organisational e-readiness: Embracing IT for sustainable competitive advantage

Citation

Alshawi, M. and Goulding, J. (2008), "Organisational e-readiness: Embracing IT for sustainable competitive advantage", Construction Innovation, Vol. 8 No. 1. https://doi.org/10.1108/ci.2008.33308aaa.001

Organisational e-readiness: Embracing IT for sustainable competitive advantage

Article Type: Editorial From: Construction Innovation, Volume 8, Issue 1.

It is widely accepted that IT is becoming a key element of any organisational infrastructure. Indeed, many like to think that the level of an organisation's reliance on IT in the twenty-first century is similar to the reliance on electricity in the previous century where it is not expected for an organisation to function without electricity. For example, networks, internet, e-mail and office automation are seen as standard applications for “reasonable” size organisations. For small businesses, standalone applications along with e-mail are seen to be essential components for running any business. However, for larger organisations, the picture is more complex, where IT infrastructure plays a key role in supporting core business functions. In this context, IT is being increasingly used to support business strategies as an enabler to leverage its potential to gain competitive advantage and therefore exploit new markets/clients.

There is ample evidence that information systems (IS) and IT per se have failed to bring about competitive advantage to organisations in spite of the large investments made over the past decade, and a large percentage of IS/IT systems have failed to achieve their intended business objectives. Previous studies in the area of “IS/IT failure” have shown that 80-90 per cent of IS/IT investments did not meet their performance objectives. Such projects were abandoned, significantly redirected, or even worse, they were “kept alive” in spite of their failure. The cost of funding such projects and the missed opportunities of not benefiting from their intended capabilities had a detrimental impact on organisations. This dissolution in the strategic benefits of IS/IT is currently forcing many organisations not to invest in IS/IT for any competitive advantage but for the reasons of bringing efficiency and effectiveness to business processes.

The main attributes of the high percentage of systems failure are rarely purely technical in origin. They are more related to the organisational “soft issues” which underpin the capability of the organisation to successfully absorb IS/IT into its work practices. IT is still, in many cases, being considered by the management of organisations as a cost cutting tool (owned and managed by their IT departments). “Technology push” alone, even though to some extent is still dominating in many industries like construction and engineering, will not harness the full business potential of IS/IT and thus unable to lead to competitive advantage. Although the implementation of a few advanced IT applications might bring about “new entrant” advantage to an organisation, this will not last long as it can be easily copied by competitors. It is the innovation in process improvement and management, along with IT as an enabler that can help leverage sustainable competitive advantage. This requires an organisation to be in a state of readiness which will give it the capability to positively absorb IS/IT-enabled innovation and business improvement into its work practices. Therefore, the term “e-readiness” is coined to measure how “ready” organisations are to adopt and use the available IT to improve their business performance and services to customers. It reflects the organisational soft issues such as business processes, management structure, change management, people and culture. The importance of organisational e-readiness to successfully embrace IT into work practices is gathering pace both in academia and industry due to the large investments in IS/IT over the past decade, of which a large percentage did not meet their intended business objectives.

The competencies that an organisation needs to develop in order to acquire the capability to strategically benefit from IS/IT, prior to IS/IT investment, falls under four main elements; people, process, work environment and IT infrastructure. The first two elements are the key to change and improvement while the other two elements are enablers, without which the first two elements cannot be sustained. The “acceptable” level of IS/IT that can be successfully utilised in an organisation, i.e. ensuring its business benefits are realised, therefore depends on assessing a range of critical issues needed to ensure a balance between the organisation's readiness (mainly factors required to adapt to the proposed change) against the level and complexity of the proposed IT (which often hinders or limits success). This balance often includes many issues, such as: capital expenditure, resource availability, organisation's maturity and readiness, culture and vision, and available IS/IT skills.

In order for an organisation to achieve the required level of capability to address IS/IT-based innovation and continuous improvement, it has to:

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  Create an innovative work environment. This should focus on developing and sustaining a highly skilled and flexible workforce which will have the skills and competencies to continuously introduce improvement through better and more streamlined business processes enabled by advanced IT. In this context, organisational learning and knowledge management become a necessity for organisations to sustain business improvements and competitive advantage out of their IS/IT investments.

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  Achieve effective alignment between business strategies and IS/IT strategies. The focus should be on improving the organisation's efficiency by directly integrating IS/IT with the corporate, strategic and operational needs. This will help ensure IS/IT resources are “in line” with business imperatives.

Therefore, the capability of an organisation to integrate a new system into its current operations depends on its level of readiness to:

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  adapt to the new business processes;

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  embrace the new business processes by employees (awareness, competencies and skills of employees);

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  adopt the changes into the organisation's work environment (a work environment which encourages the expected changes to occur); and

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  accommodate the new technology within the existing IT infrastructure and management thereof.

In summary, organisations need to rethink their processes, structure and work environment in the light of the advances in IT in order to harness the value of technology to achieve sustainable competitive advantage. The need for “forward looking” management tools to measure the current capabilities of organisations in the relevant areas and to predict the required level of organisational change therefore becomes critical. This is an area which is highly under-researched and needs focused efforts to develop tools, guidelines and methodologies which can help organisations effectively transform their work environment into dynamic “systems” where IT-based innovations underpin business improvement and sustainable competitive advantage.

New approach to the “Editorial” section

Construction Innovation aims to provide its audience with the latest development in construction research. In this context, we are very keen to capture such knowledge and present it to our readers at the earliest stage possible. Hence, we are replacing the Journal's “traditional” Editorial, as from the first issue of Volume 8, with emerging issues covering the latest research in our field. Each Volume of Construction Innovation will address a new research topic, evolving themes and prior research topics written by experts in that field.

We would be delighted to take any feedback, suggestions or contributions from all our research community regarding ways in which this new approach can be exploited and leveraged to its full potential.

Mustafa Alshawi and Jack Goulding