Aspects of IT Services in the Business

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Table of Contents

Introduction
Analysis
Problem Statement
Alternatives
Choice of Alternative
References

Introduction

The rapidly developing IT sector became one of the most critical instances in the business world. The invention of a young Intel engineer, Ted Hoff, completely changed the technology for computer processing, laying the foundation for the IT sector (Carr, 2014). The influence of this transformation was considerable and led to the digitalization of the business models (Carr, 2014). Moreover, the new business models included new departments responsible for consulting and improving technologies. Their services increased the productivity and effectiveness of the process, as IT turned to be ubiquitous, expanding the availability and decreasing the price (Carr, 2014). Although strategically this sector was hidden, its importance and implementation emerged on a large scale. It is soon becoming evident that IT services available in the business allow companies to obtain real profit and a good advantage, and avoiding commoditization is one of the relevant issues to address.

Analysis

The rise of the IT sector led to technological advances in the business world. As Carr (2014) highlighted, many scholars support the view that investment patterns related to technologies boomed with the introduction of the IT sector, transforming entire industries and their economics. Infrastructural technologies facilitated by IT services provided more effective operative methods and broader market change (Carr, 2014). IT systems are said to be well-established and organized in terms of functionality. According to Carr (2014), the high standardization on each stage of the processing creates homogenization of its functions and accommodates an overwhelming cost for isolation. The main benefit of these systems is that software and business activities achieved in them are highly replaceable (Carr, 2014). At present, businesses purchase and refresh more than 10 million devices, including laptops, personal computers, and routers (Carr, 2014). These actions require investment and financial support from the company.

Problem Statement

The problem associated with the IT sector is related to its commoditization. Carr (2014) stated that IT is recognized as a transport mechanism that carries digital data similarly to railroad transportation of physical goods. The gradual and rapid development of the IT sector created higher standardization of the technological principles at each stage. The critical issue in the IT sector is its deflation due to increased affordability (Carr, 2014). Although IT gives long-term opportunities and competitive advantages for forward-looking companies, it cannot guarantee quality. Although IT-based companies always try to develop their software facilitating IT industry transformation, it proved historically that infrastructural technologies transform from one form to another due to the market evolution (Carr, 2014). Therefore, the IT technologies could be outdated after a particular time.

Alternatives

There are two options on how to avoid the commoditization of the IT sector. Each of these strategies provides possible variations and improvements needed to eliminate this problem. The first option introduced to avoid commoditization is to create from commodities necessity. The company has a product that is considered a commodity; therefore, it should convince the customer that the product now is necessary (Bhasin, 2019). Starbucks coffee, Nike sneakers, Apple laptops, and smartphones are good examples of this change. In IT, stakeholders already observe the value of this practice because an opportunity to create a strong demand is a market advantage (Bhasin, 2019). However, as a disadvantage, one can mention the unpreparedness of IT companies from a budgetary perspective. Such a strategy requires a sufficient financial base, and young firms may not have enough resources to develop effective marketing proposals.

Another option offered to avoid commoditization is to gain greater pricing latitude. According to Bhasin (2019), achieving a highly appealing brand image could help reduce companies price-based competition. It is critical to provide a competitive cost that is flexible and improves customer experience. This is an advantage because the IT sector is expanded to different companies with various sectors of services (Bhasin, 2019). In addition, IT market participants can offer customers different options to predict buying behavior, which is also a benefit (Bhasin, 2019). However, pricing latitude can be associated with some negative consequences, such as unequal market access and fierce competition. Achieving brand value can be challenging due to the wide presence of numerous participants offering services at different prices, and gaining customer trust can be difficult.

Choice of Alternative

The possible and more effective option that will eliminate this problem is transforming a commodity into a necessity. Although this change requires enormous efforts, its results produce productive operations. Creating a reliable and popular brand will protect the product from competitors (Bhasin, 2019). Moreover, obtaining popularity allows the company to manipulate trends and introduce its settings. The company will transform its marketing standards, but a few additional changes will be required and not much time will be needed. Therefore, even if the course and focus change, the well-known and well-established brand with a great base of customers will be able to survive compared to other small companies (Bhasin, 2019). The effectiveness of this alternative is emphasized by the fact that IT services are in demand in most of the offices (Carr, 2014). The company can reorganize its principles of interacting with the target audience, but no crucial changes in pricing and other policies are needed. Thus, the first option is an appropriate alternative to promote.

References

Bhasin, H. (2019). Commoditization: Meaning, examples, and how to avoid commoditization. Marketing91. Web.

Carr, N. (2014). It doesnt matter. Harvard Business Review. Web.

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Aspects of IT Services in the Business

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