Information Rules: A Strategic Guide to the Network Economy by unknow

Author:unknow
Language: eng
Format: epub
Tags: Business & Economics, economics, General, Information Management, computers, Management Information Systems
ISBN: 9780875848631
Google: aE_J4Iv_PVEC
Publisher: Harvard Business Press
Published: 1998-11-15T00:08:02.535525+00:00

LESSONS

Consumer lock-in to specific technologies, and even to specific brands, is an ever-present feature of the information economy. Both buyers and sellers have much to gain from evaluating the consequences of their actions over the entire lock-in cycle. Short-sightedness can be extremely costly when switching costs are involved.

We have three basic lessons for purchasers of information systems and technology:

Bargain hard before you are locked in for concessions in exchange for putting yourself in a vulnerable position. If you can’t avoid lock-in, at least get paid a sweetener up front to compensate you for becoming locked in.

Pursue strategies like second sourcing and open systems to minimize the extent of your lock-in. Even if you must make investments in a particular technology, you can still plan ahead to avoid becoming beholden to a single supplier.

Look ahead to the next time you’ll be picking a vendor, and take steps at the outset to improve your bargaining position at that time. Retain information on your relationship with the seller, such as maintenance records, and use patterns that could reduce costs if you have to switch to a new supplier. These will be valuable assets if you decide to break off your relationship.

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