The Role of IT in Improving Business Efficiency, Innovation, and Competitiveness

Abstract

Information Technology has become a strategic factor in driving business transformation in the digital era. The application of Information Technology enhances operational efficiency through automation, supports data-driven decision-making, expands access to global markets, and facilitates product and service innovation. However, these changes also create new challenges, including the need for rapid adaptation to market dynamics, data-driven competition, and cybersecurity risks. This study employs a literature review approach to examine the contribution of Information Technology to organizational performance, competitive strategy, and its influence on relationships with customers and suppliers. The findings reveal that the strategic integration of Information Technology not only generates cost efficiency but also increases organizational flexibility in responding to environmental changes. Furthermore, Information Technology plays a crucial role in supporting business model innovation, strengthening service personalization, and fostering long-term sustainability. This research emphasizes that Information Technology is not merely an operational tool but a primary source of competitive advantage that determines business competitiveness in the digital age.