Chapter nine

This chapter told us that there were the four paths of IT spending for IT spending in the companies. These are the path of propaganda, the path of problems, the path of pennies, and the path of profits. The first path of propaganda described that when the company got the new technology, the company did not have the well knowledge for this new technology. Thus, the company just spent the money buying the new technology and did not even know the new technology, and the company usually spent more than the industry average. However, the book said that if the companies’ spent less than the industry average, they would lose profits. That is very wrong and incorrect assumption. The second path of problem was that the companies spent money solving the problems which they met in the new technology. However, the most important path is that companies should reduce their inventory and assets to rid unused technologies adding to costs. The third path of pennies is that the companies just consider the cost but did not consider how IT would be a powerful and useful strategic. For example, some companies just bought the system and use the system, but they did not spend the money make their system to become the strategic of the companies. This way can not make the companies increase their competition in their industries’ areas. The final path of profit is that companies combine the strengths of previous paths. For example, Jetblue operates at a lower costs than the traditional airlines but they get much higher returns than the traditional airlines. Their partnership with Microsoft helps their IT processes because Jetblue did practice simplicity in their IT processes with Microsoft. Microsoft helps Jetblue’s customer service agents to operate from their homes using VOIP technology. That is very fresh idea to save the rent and labor expenses.