Value of IT to Organizations–IT

Value of IT to Organizations

Introduction

Information technologies have been dramatically changing the organizations’ management over the recent past. Although business strategies and organizations culture are the ones which shape the use of IT in these organizations sometimes the influence is stronger. IT creates opportunities as well as significantly affecting strategic options and issues that the manager will always need to address in different aspects of their businesses. However today there is an increased recognition that information is a very key resource in any organization comparable in importance to human resources and capital. There is believe that  in some sectors that, as labor was the most  critical source during the agricultural age as well as capital was also the most critical sources during the period of industrial age, then information will also be the most critical source during the post-industrial age. Thus information management by the organization will greatly determine if they will survive and grow in the future (Drucker, 1988).

There are several dimensions on which the information technology role is changing in most of the organizations. For example information technology is deviating from its initial administrative and support functions which includes; personnel, travel, and training information technology today is being considered very important for operations of revenue generation as well as organizations division. This is very true especially in the organizations where the in time operations are very critical, for instance, in retailing, banking, and emergency services. Information technology has also gained the attention of top management. Thus in very many organizations there are direct involvement of the top management by being in the front line to advocate for the organization to utilize the information technology in its daily operations.

 

Moreover, the gaining of attention from the top management has always resulted in the integration of telecommunication and data processing functions all of them under one organization. Hence there has been a shift of information technology from a support operation which is highly decentralized to a strategic function which is centralized. A combination of several forces can be credited for the responsibility of information technology changed role in many organizations and those forces includes; intense competition, globalization of business operation, organizational changes as well as technology revolution.

Intense competition          

Intense competition experienced in most markets today is definitely forcing many organizations to become more effective and efficient. Hence one way to increase effectiveness and efficiency is through is through the integration as well as using information technology in the organization’s procedures. In most developed countries, most of their industries are at the stage of maturity in their life cycle. Thus, as the maturity of company approaches, lack of excess capacity and growth leads to battles in market share with its competitors. One way to regain its competitiveness is through incorporation of information technology in its procedures. This is because the user of the information technologies leads to reduction of operating costs through automation as well as improving the quality of the services or products by provision of quality assurance. This results into much reduced error per every unity of activity. There is also a possibility of creating value added service through information technology which leads to creation of differentiation. Also information technologies have been extensively used over a long period of time for the purpose of competitive intelligence. Thus to survive or to thrive better in any competitive environment the CEO should be in a position to deploy a information technology which is consistent to propagate business innovativeness reliably and widely. Thus, deploying information technology in an organization serves very distinct roles whereby they catalysis emergence of innovative ideas as well as acting as an engine to deliver them to their appropriate destinations

Globalizations of business operations    

The globalization of business operations has always been the second force which has been responsible for improving strategic importance of using the services of information technologies in many organizations. There is always some global operations extent in almost all businesses, whether industrial or consumer, low technology or high technology as well as services or products. However one critical requirement of global business operation is the elimination of distance and time barriers or drastically reducing them between any organization, its customers, its suppliers, its shareholders as well as its people. Thus, coordination, control of financial, physical and human resources, just in time or on-line communication becomes very essential. All these can only be effectively achieved through incorporation of information technologies in the organization.

Organizational   changes

Organizational changes and more especially the organization of corporations has been one of the reasons which have drastically increased the information techniques importance in many organizations. One of the most important reasons for reorganization is mainly cost efficiency which is achieved through automation and consolidation of functions. Thus, most of the organizational changes which includes acquisition and mergers, consolidation and downsizing, crisis management as well as reorganization which is market driven are most responsible for information technology increased importance. There are several dimensions on which the information technology role is changing in most of the organizations. For example, information technology is deviating from tits initial administrative and support functions which includes; personnel, travel, and training information technology today is being considered very important for operations of revenue generation as well as organizations division. This is very true especially in the organizations where the in time operations are very critical, for instance, in retailing, banking, and emergency services. Information technology has also gained the attention of top management. Thus in very many organizations there is direct involvement of the top management by being in the front line to advocate for the organization to utilize the information technology in its daily operations

Information Technology Revolution

The above discussed three forces create the need, whereas information technology revolution has been the enabling force responsible for increased strategic importance which is associated with information technologies. Nowadays residence customers and small business are able to afford a lot of information technologies due to the high performance products, low cost and services. There is also reduction of costs in fiber optics, digital services, and switching systems. However, the information technologies are currently being used to bridge the gap between the usage and needs of the customers which are as a result of their increased importance in many organizations.

Conclusion

Information technology is nowadays increasingly referred to as any organizations strategic resource. Hence, information technology has managed to gain the required attention from organizations’ managements. Recently, information technologies have also drastically evolved leading to improvement of their applications. However, virtually all organizations have now embraced the information technology in order to continue with its market viability, through operation cost reduction which occurs as a result of automation which in turn leads to increased competitiveness and innovativeness in the organization.

References:  

Adner, R., and Snow, D.C. 2010. Bold Retreat: A New Strategy for Old Technologies. Harvard Business Review, production no R1003E, pp.1-6.

Drucker, P., 1988. The Coming of the New Organization. Harvard Business Review, Volume 88, pp.45-53.

McAfee, A. and Brynjolfsson, E. 2008. Investing in the IT That Makes a Competitive Difference. Harvard Business Review, production no. R0807, pp.1-11.

Sheth, J.N., 1994. Strategic importance of information technology. Advances in Telecommunications management, vol.4, pp. 3-16.

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