| Few information technology (IT) applications can provide a sustainable competitive advantage. Most systems can be imitated or enhanced by competitors, and any initial strategic advantage is competed away. Being able to determine if a proposed system will provide or support sustainable competitive advantage is of value to management.; To remain competitive, a company may be forced to implement a strategic IT application that will not provide long-term advantage. Being able to identify a potential "strategic necessity" would help managers avoid the possible costs and risks associated with being a pioneer.; Questionnaire and telephone interview data from 85 insurance company executives were used to examine several research propositions and questions related to strategic IT applications. The relative incidence of strategic necessities and competitive advantages, the underlying reasons for these outcomes, and the temporal dimension of sustainable competitive advantage through IT were studied.; The major findings of this research include: (1) The data did not support the proposition that the outcome of implementation of a strategic IT application is more likely to be strategic necessity than sustainable competitive advantage. (2) The amount of competitive advantage provided by an IT application varies with the extent that the application is a strategic resource or capability or that it leverages strategic resources or capabilities supporting a competitive advantage. (3) Experience or knowledge bases, market reputation, and product-marketing functions of companies are strategic resources and capabilities contributing to competitive advantage that are leveraged by IT applications. (4) Pioneering adopters' IT innovations enhance the introduction of new products to customers and block competitors. In addition, product introduction leaders experience more customer loyalty and an enhanced reputation in their market. (5) Sources of sustainability of competitive advantage supported by strategic IT applications include: (a) unique organizational features, (b) field- and market-oriented resources and capabilities, (c) the lack of readily available substitutes, (d) the inability of competitors to observe the conditions and actions necessary to achieve a competitive advantage, and (e) resistance to depreciation or obsolescence. |
