The Role of Information Technology in Business
Information Technology is an enabler of business functions. The benefits of a well implemented IT system can include efficiency, capacity, speed, scalability or accuracy to a business process. But it is a common misconception that these benefits should apply to the Information Technology system itself. In fact, the benefits should apply to the business function itself and should be measurable in terms of business output. In other words the system should make the business better in some way.
One such example is a Point of Sale (POS) system. The implementation of a good POS system should be measurable in speed, accuracy or capacity. The benefit is clearly to the business, not the POS system itself.
This example is a good introduction to the role of Information Technology in business. Information Technology (IT) enables businesses to solve problems in ways and scales that were previously inconceivable.
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IT as an Enabler - A Competitive Advantage
Business can realize a competitive advantage from IT systems through many avenues. Whether it is increased sales, better customer service, improved customer relationships, faster service, more efficient service, diversity, reduced costs or higher quality products there is little debate that IT systems can be used to improve traditional business functions in order to provide a competitive advantage.
IT as a Facilitator to New Markets
It is not just the wide reaching international tentacles of the Internet that can open new markets to business. Different demographics can also be reached through the use of trendy and popular media. In this instance, IT plays the role of facilitator because it acts as a go-between between the business itself and the new market.
IT to Provide Agility
The economy, events, trends and circumstance play a part in business survival. Once upon a time computer games were the domain of children and teenagers. Today many adults are consumers of gaming software. This transition in demographics meant that software companies needed agility to cater to their new market. Not just in terms of the type of software that they produce, but also in terms of service, availability and ease of use.
Information Technology systems can be used to give business additional agility in many areas that include, but are not limited to, disaster recovery and business continuity, service delivery, scalability, customer service, growing or shrinking product range and access to customers.
IT to Enhance Decision Making
The massive volume of information available today both on the Internet and through corporate networks can be used as reference material to make or justify decisions. The benefits of ample and accurate information have been known and well understood by the military for hundreds of years. Modern businesses are also apt in these skills and Information Technology is at the forefront of this communication.
But most importantly, the role of Information Technology should always be measured through benefit to its masters. Whether the benefit is realized financially, socially, through reduced risk, by better efficiency or an improved product it is important to continue to focus on the benefits that pertain to the core business itself. Too many times today businesses become confused by focusing on benefits to the technology.
Information Technology supporting Information Technology
No doubt that occasionally the IT systems themselves will need upgrading, maintenance or replacement. Sometimes the benefit to the business may be something that is not tangible such as reduced risk to other systems. Backup systems are a good example of this kind of benefit.
IT to Engage Customers
Social media has been adopted by most world known brands in order to engage customers, to gain feedback and/or to build a sense of community.
IT to Reduce Risk
The reduction of risk from the adoption of IT systems is almost a paradox. Yes, many risks that existed using the traditional paper systems can be mitigated however a brand new set of risks have been introduced. Some elite IT systems, however, have been developed as fail safe systems. These are deployed as mission critical systems and have the primary task of reducing the risk of failure to an infinitely small percentage.
More affordable, commercially available systems are also available as risk mitigation, they are not as effective as mission critical systems but can be very effective nevertheless. These are often seen in the form of stacks, clusters or farms.
