In this paper an attempt has been made to show how information technology (IT) is used as a strategic tool to meet competitive advantages and how it is rapidly becoming a necessary ingredient for achieving quality within the service industry. An in-depth review of information requirements for service sectors has been made and the possible relationships between IT and typology of service organizations, service quality and improving market position have been highlighted. Also, integration of IT and service dimensions has been addressed and some important issues required for a successful integration have been proposed. The findings indicate that different types of service operations require different levels of IT. Authors have also emphasized that IT plays an important role in the service industry, especially in financial and healthcare sectors and it will continue to increase in importance as managers further appreciate the benefits that can be gained, as IT is treated as a strategic issue and as the complexities of a large network, demand increased capabilities in information management.