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1 INTRODUCTION No one can doubt today that Information Technology IT especially computers has created a dramatic impact on the business environment In every office there must be telephones facsimile machines and computers IT has become a need Companies spend millions of dollars investing in IT with the hope to gain a competitive edge over their competitors However in June 2003 a raging debate was going on in the business circle Everyone was engaged in heated discussions over a thought provoking article IT DOESNT MATTER This article first appeared in the May 2003 issue of the Harvard Business Review was written by Nicholas G Carr Carr 2003 argued that IT is very affordable today More and more companies are investing in and implementing IT IT has become a commodity and its investments do not justify the required returns Therefore IT is diminishing as a source of competitive advantage and should be managed defensively spend less on IT and avoid risk So is it possible that IT is diminishing as a source of competitive advantage Can IT still support and sustain organisational competitive advantage This report critically analyses this issue but before these questions can be answered it is important to understand the functions of the organisation the role of information technology and the process of achieving sustainable competitive advantage Subsequently the analysis touches on the ability of IT to continue supporting and sustaining competitive advantage and demonstrates that IT does matter with a case study on a successful company Federal Express 2 BUSINESS ORGANISATION A company set up with the purpose of carrying business activities is a business organisation Elliot and Starkings 1998 p 198 defined a business organisation as a human activity system that deals with and is affected by the internal and external forces found within the business environment For the purpose of this report a business organisation is referred to as
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