Information technology in the business world through the years and beyond!
Information Technology (IT) can be defined as a collection of individual technology components that are typically organized into computer-based information systems. Information technology has changed the way the world does business. Businesses no longer have to rely on a trail of paper work to conduct everyday’s transactions. Slow snarl mail is a thing of the past. Customers no longer have to leave their homes to buy products or transfer money from their savings account to their checking account. By just sitting in front of a computer screen, businessmen can attend meetings that take place several miles away. As the business environment continues to evolve at a rapid rate, management of every type of industry is searching for new ideas and possible core competencies to capitalize on. One area that has been closely examined is information technology. Over the past decade the importance of IT has been stamped upon the minds of top executives worldwide. In the past, computers were just an object that people thought only the rich and large companies possessed, but today computers run our world. Information technology has become more and more prevalent in businesses and our daily lives. Information is now available instantaneously and in incredible amounts across the globe. How these emerging technologies are affecting the personal, social educational and political aspects of the business world and of our fives you ask. Probably the one aspect of Information Technology that has the largest affect on the business world is the World Wide Web Garson. The Web has basically eliminated any limitations on communication around the world and has provided efficiency and productivity in the business industry and the world economy.
The most competent business strategy that companies have now is electronic commerce. Electronic commerce is defined as a multifaceted concept involving the exchange of products, services, information, or money with support of computers and networks. Currently, $80 billion is traded over the internet annually, and by year 2030 the number is estimated at $4 trillion. Levi Strauss & Co. has effectively incorporated information systems with their business. Levi Strauss was forced into the information age in the early 1980s by the competition from designer-label jean manufacturers. The company wanted to get closer to the retailers who were selling their products. Levi Strauss came up with LeviLink which is a global connection of the retailers that puts the right pants, in the right sizes, colors, and styles on retailer’s shelves. LeviLink uses bar codes that record the garment’s color, size, and style in the database. Levi Strauss is then sent the information from LeviLink. The retailers then reorder the right jeans, shirts, or pants in the right color, size, and style. LeviLink has increased the annual sales of stores 26 percent to 30 percent. Overhead costs have dropped since the retailers now use just-in-time inventory software to cut holding costs and provide more accurate inventories.
Most plastics companies are using desktop computer systems to run their inventory control, accounting, and human resource management. Information technologies have changed the plastics manufacturing workplace by using new computer-base programs. Machines have reduced cycle times, increased productivity, and safeguarded superior product quality by using microprocessor controls. Remote computer diagnostic systems are linking the process machine to their customers to shorten maintenance downtimes. Information technology has also limited the time that human supervision of the manufacturing process requires. Machines can monitor their functions in order to anticipate part failure without the aid of humans (Dickerson, 2003). Due to this process, the maintenance programs have become more flexible than it has been in the past.
The Canadians have come up with a network known as CertaPay. CertaPay is the world’s first e-mail payment network of its kind and scale. CertaPay’s Universal Funds Transfer Platform will make possible an ample range of next-generation payment capabilities. The transactions take place through e-mails. The persons involved do not have to physically visit an office to conduct of banking transactions. The user sends the recipient an e-mail and provides information on the payment amount, account from which funds are to be drawn, a security question and an optional personal message. When the e-mail is received by the recipient, the sender’s account is debited and the recipient’s account is credited. The transaction becomes electronic and instant. CertaPay makes their money by charging a fee on each online transaction somewhat like an ATM fee. There are five million Canadians who use this online banking system to send and receive money transfers. There are fifteen million Canadians with an e-mail account who can receive a money transfer. This makes CertaPay the first and largest person-to-person interbank network in the world.
2. EFFECTS OF IT ON THE BUSINESS WORLD
Another way the information technology affects business is web conferencing (Garson, 2001). Businesses are using web conferencing to keep away from time-consuming and expensive travel. Web conferencing can also improve staff training and interactions with clients. An example of how web conferencing is used when a CEO delivers a live video and audio talk to employees or suppliers who watch on their computer. The CEO can discuss marketing strategies, show Power Point slides, go over finances of the company, and talk about future advertising campaigns. All of this can be done without having to book airline tickets and hotel rooms, renting cars, and using expense accounts.
Wal-Mart is one of the biggest companies in the world with 4,457 stores, 30,000 suppliers, and annual sales of more than $217 billion and one information system. By running a centralized information system Wal-Mart has a competitive advantage and has one of the lowest expense structures in retail. New technologies that Wal-Mart is working on include radio frequency identification. This will soon replace bar codes, and managers will be able to see what’s on the shelf and what’s in the storage back without associates having to verify it. Voice over IP is when an associate moves or transfers and the phones must be changed. The associate will now take the phone with him, plug it back in, and everything will work the same again. Wal-Mart will also have devices that will let customers get product information from computer assisted selling. In the future Wal-Mart will start simulating their business with computers. The model will help maximize sales before the actual event occurs. Hypothetically, Wal-Mart can run programs simulating Christmas sales on the computer and prepare for the outcome before it even happens.
Even the war with Iraq uses information technology (Songini, 2003). Combat situations in the information age have become real time operations relying on information technology. The U.S. Army has 64 mobile units equipped with portable systems that scan information about combat and supply vehicles. The data is then sent via a secure satellite link to the Army’s central asset-tracking system. The system is called Transportation Coordinator’s Automated Information for Movements System. It is built around a Sybase database that runs on a Windows server. The system comprises of a 65-lb case with a laptop, wireless bar code radio frequency identification readers, a printer and other peripheral devices. The system is used to scan vehicles and supply convoys as they approach checkpoints. This system gives commanders in the field real-time information about where people and equipments are. Commanders will know when the supplies or convoy reach their destination. The system will allow up to 15,000 end users access at any given time. Before the system was developed commanders did not know what was in the boxes that were being delivered until someone opened the box. With this automated system commanders can know what is in the box as well as know where it is. The Army is also working on providing commanders with the location of military personnel along with materials in the air and on sea or land. It will be able to calculate the cargo space available on aircraft and manage the loading of ships.
Retailers have discovered that the electronic recording of sales can shorten business transactions. Legal firms and government agencies have found that important documents can be stored electronically. This reduces the costs of storing such papers physically. It also saves physical space in the work environment. Banks and financial institutions have eliminated paperwork and sped up the process of moving funds by electronically transferring funds. Manufacturing firms can communicate with suppliers and customers via extranets. Such interaction has reduced human error and strengthened the relationships between suppliers and customers. Transporting companies such as FedEx and UPS have utilized technology to allow their customers to track packages by using the Internet. Accessibility is one of the characteristics of IT. Customers can easily find information about products or services on websites throughout the internet. This can be a problem. Businesses are now recognizing that such accessibility can be abused. Computers can be hacked to find private documents in the company’s possession. Therefore, the security of electronically stored information is a growing concern. Also, firms that participate in online transactions must have surveillance for each transaction. The opportunities for improvement through information technology have grown exponentially. After the tech boom of the 1990’s, an unprecedented focus has now been trained upon the suppliers of IT. Empirical studies in European countries have shown the impact of IT and the practice of e-business in subsidiaries located there. Smaller firms realize little improvement in daily operations from the introduction of new information technology. However, because of economies of scale, larger firms are able to profit from IT innovations. Productivity and cost efficiency have improved. Managers now realize that IT is an area where the business can speed up processes, eliminate paperwork, increase the quality of output, decrease storage costs, and increase the knowledge shared between customers, suppliers, and intermediaries.
According to information technology experts there is a shift in the IT environment taking place. In the formative years of IT development, computer and IT suppliers were the drivers behind change and innovation. Therefore, IT vendors pushed IT to its explosive growth and success in the past decade. According to IT gurus,” IT customers no longer need to improve IT for its own sake. Now the reason they need technology is to make their business better” (Maxey, 2002,). Executives and managers have realized that IT is flexible enough to be fashioned to fit any size and any kind of business.
Businesses are seeking to use such flexibility to create value within their organization. The improvement of computer processing speed, the growth of memory capacity, and the decrease in computer costs have enabled companies to improve the relationships between performance and cost. Portable computing has allowed business transactions to take place at any place, and at any time. Cars and machines routinely have portable computers installed to perform tasks. IT has even let firms mimic the human thought process. Intelligent agents and intelligent systems have preprogrammed rules that make decisions based on automated rules. Such usuable intelligence helps users by accessing databases and conducting ecommerce. E-commerce is simply business that takes place online. Products and money are now exchanged by interconnected computer systems. E-commerce eliminates unneeded positions within an organization. This changes the processes and management of companies worldwide. IT suppliers in Europe and the United States are working to integrate computing, telephone services, and television. Other companies are experimenting with E-document management. This form of IT reduces the need for physical space for storage. Also, organization of documents has proven relatively simple. E-document management converts paper-based documents to digital electronic form by scanning the physical copies. Large firms are utilizing data warehouses to store large amounts of data. Such warehouses can be accessed anywhere if integrated with the Internet. Easy access is an advantage for users. Enterprisewide computing is changing the landscape of business altogether. This refers to a linkage established by the electronic infrastructure of an organization. Companies link information with business partners. Such coupling of information has led to quicker delivery of products to market. Trust is established and relationships between suppliers and customers are improved. A new analysis process called data mining is being used to show relationships among data. Executives and middle managers use this new knowledge in making decisions. Organizational communication has been radically altered by intranets. Intranets refer to networks set up to link all business units within an organization. Storage is becoming simpler and more cost effective. CD-ROM’s and hardware upgrades allow room for multimedia technologies. Efforts to create a more fluid process of communication between business partners have given rise to extranets. Interorganizational communication is enabled by extranets. Presentations have been enhanced by multimedia technology. Advertising, direct selling, and training are all buoyed by this collaboration of voice, text, video, and graphics.
Each industry must meld IT to fit its specifications. One industry that is placing more emphasis on IT is healthcare. Healthcare costs have steadily increased over the past decades. Luckily for the health industry IT is poised to help solve the cost problem and other issues. Quality, cost, and service issues are threatening healthcare. Hospitals and clinics began to invest in IT infrastructure years ago. For the most part, health providers have not seen the quality, productivity, and decision-making improvements they expected from IT implementation. For this reason, administrators began to question the true value of IT to the healthcare industry. Value of IT in business can be measured in three dimensions. The first dimension is the relationship of the IT investment to the core business processes. IT must be making a difference for the competitive advantage of an organization. The second dimension is that of the IT investment’s relationship to the customer. If the technology is in a front office system (such as ordering machines), it will be integral in determining for the customer whether his/her experience was favorable or not. The third dimension is that of the business goal for which the IT investment is made.
The reason that most IT investments have not brought about the kind of returns envisioned by executives in healthcare is that IT investments have not been traditionally made to support core business competencies. For years back office systems, such as Human Resources, Billing, and Payroll, have been automated to cut costs and improve productivity. Now front office systems will take care of registration and scheduling at an increased rate. The initial effect should be better customer service.
Healthcare administrators seek to improve their businesses by increasing productivity, improving quality, and improving service. To increase productivity simple, repetitive tasks are automated. Consolidation of certain functions is possible. Computer systems also support information reporting. This enables users to access more information to make decisions with. To boost quality information systems record and distribute reports. Automated alerts are now being considered for use by doctors and nurses. Service can be improved through responsiveness, customization, and availability. The general idea is to satisfy the customer’s expectations. Call centers are being established in hospitals to gauge customer satisfaction. What would your great grandmother say if you were to tell her that you went to the grocery store and checked out your groceries, but without accompanied by a cashier, or took money out your banking account and did not speak nor see anyone, nor get down? She would probably give your mother a number to a good doctor in town, right?E-mail or electronic mail has probably been the most important technological advance in businesses. It has provided information transfer to other countries anywhere in the world in a matter of minutes. People are relying on e-mail for their reports, memos, foreign trade, marketing campaigns, and all other sorts of mail transfer. People and businesses can operate quicker and more efficiently using e-mail rather than the postal service, which can take weeks to receive. E-mail will account for 50 percent of mail received by U.S. households by 2005, up from 35 percent today, threatening the $196.8 billion direct mail market.
Computers have brought the business environment to a whole new level of operating. There are continuous changes within technology that are taking place, and if organizations do not accelerate with these changes and the competitive environment, they can say goodbye. In order to play the field, many companies obtain and are operated by, information technology. Information technology (IT) is defined as a collection of the individual technology components that are typically organized into computer-based information systems. The computer is a powerful tool for gathering, manipulating, and distributing information. One must comprehend information technology and its potential, for it has become a necessity for personal and professional growth. Information technology has changed our lives and will continue to play a bigger part of our daily lives. Companies’ focal point must be on their strategies and on top of the business pressures. With the enormous competitive market, organizations are constantly looking for breakthroughs that will give them an advantage of their competitors. IT assists organizations in many ways, such as strategic decisions, timeliness, and reliability. IT systems enables management to increase the pace of decision making, implementing strategies sooner, which changes the relationship among customers and suppliers which can drastically increase production and market ratings. To assist with these increasing complex tasks, management information systems (MIS), which access, organize, and display information to managers, is a system that plays a major role in the managers position (Gellman, 1990). MIS prepares reports by processing information from the organization’s database. MIS assists in many functions such as estimations of future sales, scheduled reports, and summaries of daily production. Many responsibilities that occur everyday, like issuing pay roll, reordering inventory when needed, keeping track of shipping records, and paying accounts payable, are all basic business transactions that are processed by the transaction processing system. With these timeliness transactions, the organization can now concentrate on the more major non-repetitive task. Many may wonder if it would be difficult to create this information because different information is in different divisions of the organizations’, and how does one division acquire another division’s information? An organization has major departments such as Accounting, Finance, Information Systems, and Human Resources Management. Each department has there own information system which is composed of several specific application programs designed to fit that department’s needs. The plant information system is a system that combines all departmental applications and provides communication among the plant. As Auto Zone was reaching 2,700 stores and 40,000 employees in 2001, the human resource department found it complicated to manage the paperwork. Management technology was then implemented into their enterprise and now uses an online document management system. This software creates images of W-4 forms and resumes. “Currently, we are imaging 10,000 documents each day”, says Jeff Mitchell of Auto Zones document management group.
One of the most outstanding changes that are taking place in the business environment is the introduction of e-commerce (Sawyer, 2003). E-commerce provides astonishing opportunities for organizations to expand worldwide at a small cost. E-commerce is simply defined as the buying, selling, and exchanging of products, services, and information via computer networks, primarily the internet. The benefits and impact e-commerce has brought not only to organizations, but customers and society, is astounding. Today small companies now have an opportunity to compete against large companies, consumers shop from their home or any location 24 hours a day, and individuals work at home, in which helps the economy with less traffic. Online advertising has enhanced many organization’s profits massively by allowing the company to reach a broad number of consumers at cheaper rates.
Information Technology not only brings benefits within the organization, but customer satisfaction has also increased with the implementation of the Internet. Today, customers are more knowledgeable about quality and availability of products that exist in the competing markets. Through the use of the internet and electronic commerce, consumers can now find thousands of products and search for the best quality and prices. Many companies also have on-line help, for example, if you wanted to purchase a television on line and needed a question asked, you could simply click on the “on-line help” icon and someone will instantly assist you. Before IT was implemented, taking inventory and scheduling for materials to arrive took a lot of decision making and planning. A company did not want to have an overload of raw materials in their ware- house, or not enough materials. Just–in–time inventory approach helps that problem by scheduling materials to arrive at the warehouse when exactly needed. Thus the managers are satisfied because costs are reduced and the work flow has enhanced. Also, customers are not waiting for a product that was supposed to be delivered two days ago.
We know ethics is defined as what is right and wrong, but since information technology is fairly new and rapidly changing, it is difficult to set a standard rule of ethics. It is understood that computer technology has had a strong impact on society and believed to loosen the moral values. For example, much of the information flowing through the internet it is thought to be morally wrong and disrupting our society (Lundberg, 1990). Thus, a code of ethics pertaining to computer technology is strongly necessity. There have been many issues that have aroused through information technology. One is the concern of privacy. Concerns, such as consumers information being held in a companies database file and questioning who else has access and just how secure is my personal information? Another issue is the use of electronic surveillance in the work force. Many employees are being monitored while using their computers, some aware and some not aware. Many individuals believe this is wrong and lack personal security. Around 2000 and 2001, Napster, a music web site, was allowing music swapping for free, which meant an enormous cut back in CD profits for musicians and music publishers. Napster was sued and later reached an agreement to start charging the customers.
Years ago the baby boomers were fearful of computers, they were troubled that computers were taking over jobs and eliminating the need for humans. Although information technology has eliminated some jobs, it was also created many jobs thus, taking our business environment to a different perspective. “Information technology industry has doubled the growth rate of the U.S. economy, accounting for more than a quarter of the country’s economic growth over the last five years”, stated by the U.S. Department of Commerce. New well paid jobs such as multimedia design, e-commerce, and network security are jobs that are in high demand of educated information technology personnel.
Information technology has brought many changes in organizations, from power to the manager’s job. It somewhat changed the power structure; the power in which the professional manager possess may actually start to drift toward those in charge of electronic applications. Workers will be expected to obtain a higher level of education and training in computer literacy. The manager may be able to spend time focusing on his employees as individuals and as they work in the field. MIS reduces time by cutting back steps in decision-making. Some experts find that IT has a negative affect on individual themselves. Giving availability to work and shop from your house, loneliness and depression could set in. Socializing and human interaction is something an individual must hold. The regular nine to five job is finding its way more to 24 hours a day at any location.
Ever feel like not dressing up for work, and staying in your sweats while you get your work done? Telecommunicating, which allows the employee to work at home while his computer is linked to his place of employment, is increasing at a fast pace in today’s industry. Although you do have your advantages and your disadvantages, it is believed the advantages override the disadvantages. Less stress, improved family life, lower absenteeism and less use of fossil fuels are experienced with telecommunicating. However, isolation, lack of social interaction, and supervising work are the down side to this new technology.
Another aspect in business that has been and is continually being affected is how business meetings are held between two or more people. The Internet, e-mail, teleconferencing, cellular phones, pagers and a myriad of other types of telecommunications have made communication among business associates and co-workers more convenient than ever. Whereas, in the past, meeting notices had to be stamped and mailed out, and on the scheduled date everyone would have to meet at the specified location Maxey. Today when a meeting nears, e-mail is sent to everyone and on the scheduled date everyone goes to the same page and the meeting can be held without anyone leaving his or her house. With the use of these technologies in communication, businesses can operate more efficiently.
The continuous improvements in technology keep the competition high, producing a bigger economy. Despite economic difficulties tied to accounting scandals and to the war on Iraq, revenue in the worldwide packaged software market will grow by around four percent in 2003, after slower growth of around 1.5 percent in 2002, according to IDC Itworld.com. Applications such as operation systems and business software will be the largest area of spending in the software market in 2003 as compared with 2002. With the extra spending on operating systems and software, the business world will continue to expand and become more equipped to using resources economically.
Despite the hard times and the cautious environment amongst buyers of information technology, polls conducted by IDC showed a willingness to purchase necessary technology, according to Gantz. Chief information officers polled by IDC were optimistic about the prospects of the U.S. economy and their own companies and expect to increase their IT spending about six percent over the next year Itworld.com.
Along with the U.S., the rest of the world is improving and increasing the technology available. The AsiaPacific region is expected to see substantial growth in Information Technology spending, with China and India predicted to be the largest markets for technology companies amongst emerging markets, according to statements made by Stephen Minton, IDC’s Program Director of Global Information Technology Markets and Trends Itworld.com. Some companies from other countries such as China and India are beginning to make more sophisticated use of their Information Technology infrastructure which will provide a bigger and better world economy.
It is obvious that new technology has changed the way of life in almost all aspects. The important thing to know is that these changes have not stopped and will continue to advance. Bigger and better forms of technology are being produced everyday, keeping up with the competition, and are being introduced to our businesses and society. Dell computers are one example that is at the top of the competition. Michael Dell, the owner of Dell computers, for example spoke at a news conference in Tokyo and said, “Despite the success we have enjoyed in quite a difficult market, we are quite optimistic about the opportunities that are available for Dell in the US $800 billion Information Technology market. If you look at the various sectors, you can see that Dell has plenty of room to grow across PCs, servers, storages, services, software and peripherals, data networking. In fact, we are growing fastest in those areas that have the highest growth Lundberg.
Windows, created by Microsoft, has grown to become the top program in the world. Again, with Windows being so popular and widely used, upgrades are very much expected as much as possible. Microsoft’s current plans calls for the next release of Windows for the desktop to appear in the second half of 2004, officials say Berger. That release is code-named Longhorn and Microsoft has promised to pack a number of new technologies into the operation system that coincide with its Web-based .Net initiative Berger. This shows evidence of how new technology is focusing toward the World Wide Web and with each arrival of a new version of Windows brings more efficient and more advanced features. With this new technology Windows is creating comes more difficult coding and more time to get it to the stores. The company is working to add more security to the software and is spending more time analyzing code, which is slowing down the process of shipping new code to customers Berger. No matter how much more difficult these newer versions take to create, Microsoft has promised its customers an upgraded version and they expect to get just that.
Besides just continuing to upgrade the Windows desktop, Microsoft has many other new ideas that they are working on. One big idea that is not far from being reality and that is to make the Web talk. Web applications, such as an airline Web site that allows users to make reservations by talking into a microphone on their computer, said James Mastan, group product manager for Microsoft’s .Net speech technologies group (Roberts, 2002). “It allows a user to maneuver (through the Web) much more quickly and comfortable. The idea is to make the experience easier for the user, and that’s really what speech enablement is all about” (Roberts, 2002).
Computer technology has many effects on the business world. Everyday there are new technologies and new breakthroughs of technology systems and applications for organizations. For organizations to continue in the market they must stay updated with these new technologies and implement them the correct way. Information technology has changed the roles of many positions in the work force and is continually going towards making decisions faster and easier, flexibility, consumer satisfaction, and accessibility (Berger, 2002). Today for one to succeed in the business world, obtaining computer literacy is no alternative.
Information Technology has made the unthinkable happen in less than 20 years. Speed, efficiency, quality, productivity, and many other aspects of the business world are affected by information technology. From the way companies market their product, to how business associates communicated on a day-to-day basis, information technology will continue to improve all business transactions and operations. These great advances in Technology will only increase with time, which will present new opportunities and will affect our way of living to where we never thought possible. In conclusion, the average information technology is moving ever closer to the complete efficiency that software developers and systems architects have envisioned since the commencement of computing. Stores like Levi Strauss and Wal-Mart are realizing that information technology can cut their holding costs and increase the inventory turnover. The U.S. Army is using information technology to track inventory and personnel. By using information technology companies will demand more respect and turn higher profits than their competitors. Today in every business in every type of industry IT is playing a leading role. Computer systems link executives with middle managers, middle managers to ground floor employees, businesses to suppliers, suppliers to customers, etc. The costs of storage are vanishing as E-document management takes hold. Multimedia presentations improve the quality of training and advertising of firms. Data warehousing allow for large amounts of storage and data mining discovers relationships never realized before. E-commerce has put the customer in control of transactions and driven competitors to compete with price and quality. Healthcare is an industry on the brink of realizing new core competencies based on IT. Management is considering measures that could make the hospitals more profitable and more efficient. While problems arise, IT professionals continue to supply what each business needs. The flexibility of IT is needed to combat the problems such as inefficient implementation, inadequate management, and the inherent complexity of each individual firm. Information technology will continue to be a factor which drives markets and industries to improvement. Quality, speed, and accessibility achieved by computer systems continue to cement the place of IT in the business world.
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Dr. Ihssan Alkadi is on the faculty at University of Louisiana at Lafayette (UL Lafayette). He received his B.S. Degree in Computer Science at SLU, May 1985. In May 1992 he earned his MS. In Systems Science from Louisiana State University (LSU). He earned his Doctoral degree in Computer Science at LSU. His areas of expertise include software engineering in general, testing in particular, Internet, HTML, and operating systems. His research interests include testing in object oriented systems, systems validation, and system verification.
Dr. Ghassan Alkadi is on the faculty at Southeastern Louisiana University (SLU). He received his B.S. Degree in Computer Science at SLU, May 1985. In December 1991 he earned his MS in Systems Science from Louisiana State University (LSU). He earned his Doctoral degree in Computer Science at LSU. His areas of expertise include software engineering in general, testing in particular, Internet, HTML, and operating systems. His research interests include testing in object-oriented systems, systems Design, and programming languages.
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