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The role of technology in business success

Paper Type: Free Essay Subject: Business
Wordcount: 1145 words Published: 1st Jan 2015

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Technology’s recent evolution has created several opportunities for organizations to improve their performance and achieve their goals. Organizations have been trying to understand how technology will add value to their operations and how they can apply it to their advantage. This essay focuses on the importance of technology, as well as on challenges faced in managing technology and, most significantly, in aligning it with business strategy and leading the organization to business success.

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In recent decades, evolving technology has played a crucial role to business success and in fact, sometimes, even in business survival; it has been necessary for organizations to incorporate technology, in order to survive in an ever-changing environment and to increase their competitiveness (Pan et al, 2008). According to Sauer and Wilcocks (2003), technology is the most important influence in the evolution of the organization of the future. But why is technology important and what actions do the organizations have to take in order to improve their performance and to achieve their goals?


In a global market where information flows rapidly, it is strategically significant to manage technology that is able to transform products and services, operations and processes, companies and even competition (Porter and Millar, 2001).

As Floyd (1997) argues, technology is important for two reasons; first, it is important to the success of every business activity, as a company is not able to deal with competition without use of technology. Secondly, it is technology-driven innovation that can lead an organization to long-term growth. In terms of business activities, organizations can benefit from technology by differentiating their products and services, reducing their operating costs, taking advantage of new opportunities and supporting change processes. As for technology assisted innovation, it seems that those organizations that do invest in technology and become innovative increase their market shares, financial figures and overall competitiveness.

Having identified the importance of technology, managers should take actions of managing technology and adding value to their organizations. In this sense, contemporary organizations, and especially large corporations, invest huge capitals on the implementation of technology over the last decades, for example CRM and ERP systems. Information technology in most business areas facilitates the control of corporate activities, improves operations and helps in gaining the competitive advantage (Lollar et al, 2010).

In industries, technology is a key component in order to meet market needs and customers’ expectations. In general, apart from achieving their goals, all the organizations need to focus on their customers’ needs. Leading companies in the market take initiatives by using technology to improve their operations, for example marketing and sales, as traditional approaches to these functions seem to be ineffective. As an example, the increasing power of the Internet (including social networking) has forced many companies to change their strategies with the aim of turning this power to their advantage (Bernoff and Lee, 2008).


Implementing technology in a complex business environment is challenging and requires a number of management tools and processes in order to incorporate changes that will occur (Phaal et al, 2005). Introducing a new technology should be combined with a strategic plan which involves a number of factors and challenges, as Haywood (1990) suggests; first, top management commitment to the technological plans is crucial. Secondly, the identification of appropriate technology and the selection of its source are two further challenged for organizations. Moreover, people within the company should be able to take advantage of new technology and become engaged with the aim of increasing value. Organizations should be organized and structured in a way that allows technological change and advancement. Last but not least, companies should be able to benefit from this change in order to become more competitive and achieve their short and long-term goals.

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The most significant of the aspects mentioned above is that technology initiatives should align with the overall business strategy; organizations should use technology according to business imperatives instead of technical criteria (Bensaou and Earl, 1998). There are multiple challenges in selecting and applying the most appropriate technology that will improve operational performance and utilize resources, people and their knowledge more efficiently. As Bensaou and Earl comment, there are several examples of organizations that either discovered that their technology did not support their business strategies or selected complex technological solutions, instead of simple ones that could be more effective.

To conclude, it is necessary to take all the aspects of technology into account, so as to implement it in ways that will add value to the business. Managers who are responsible for technology should take initiatives and make the right choices, which reflect the organization’s strategy and can lead to business success.


Zara is one of the largest international fashion companies and part of one of the world’s largest distribution groups, Inditex. Zara’s approach to technology is based on the principle of low IT investment that can deliver maximum value to the company. Despite being an information-intensive business with dynamic global operations and millions of customers, there is remarkably little information technology (MacAfee, 2004). Zara focuses on the human factor instead of technology, allowing people to make all the decisions; there are no CRM systems, no scheduling software and no ERP platforms involved in their operations; there are no intranets or online connections among stores, production units, distribution centers and the headquarters; computers are used in a limited and standardized manner. Despite all these facts, Zara has achieved better performance and higher profits than its competitors, thanks to its targeted technology strategy and alignment of the limited implemented technology with the company’s flexible business plan.


Technology is one of the most crucial factors for business success. However, it is not the only factor; it should be an enabler for the organizations strategic plan. As a result, there is a need to find a balance between technology and business strategy, with the aim of addressing the organizations needs and achieving business goals.


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