Information Technology Influences on Business

Subject: Tech & Engineering
Pages: 6
Words: 1434
Reading time:
6 min
Study level: College

Technology has grown significantly in the last century with irreversible effects on local regional and global matters. Technology has had a tremendous impact on human societies such that it is the basis of all aspects of societal growth. Among other factors that have influenced globalization is information technology. Other than improving the way in which business information is relayed, Information technology has also improved production and other modern business practices.

The most important thing is that the growth of information technology is taking place on a global scale, the effects of which are also felt globally. Furthermore, the influences of information technology on business are irreversible. With new technologies being innovated, it is now clear that the possibilities and opportunities in terms of business provided by these technologies are infinite. As such, the influence and effects that information technology has cannot be exhaustively quantified.

Due to the numerous influences that information technologies have on business, economists as well as psychologists and even sociologists have taken notice of the role that IT plays, with the influence on the business being a common topic (Information Resources Management Association and Khosrow-Pour 2002). However, this essay will highlight the influences of information technology on business on a global scale as well as highlight how modern businesses can utilize information technology to have a competitive edge.

Information technology has a significant influence on the business process. The term business process emerged at the turn of the last century and is attributed to Fredrick Taylor and American industrialists who developed the scientific management model intended to improve the business process as a way of improving business efficiency. Business processes are concerned with work procedures involved in the entire business transaction. Taylor’s model has undergone a variety of changes with the most recent one being the introduction of Business Process Reengineering, BPR, which ushered in the use of information technology.

The combination of business process and information technology is seen as one of the most critical platforms growth and development of business. Together, these two variables are noted to have a number of positive effects on global businesses.

The two are claimed to be the new form of business redesigning technologies that will enable businesses to transform the way they function. Eatock et al. (n. d.) note that it is worth to note that information technology is not a method for business reengineering but “an enabler: it is the platform in which business transformation occurs” (p. 30). In many organizations globally, business process reengineering efforts are developed by the organization’s information technology departments. By integrating information systems and business processes, information technology helps largely improves the performance of business processes (Davenport 1993].

Currently, there are a number of organizations that are stated out as single units but have grown to be big global corporations within a short period of time. These corporations include Wal-mart, Exxon Mobil, and many others and are part of a trend referred to as globalization. There are many factors that have helped the growth of globalization, but none as effective as the role of information technology. When clearly analyzed, the organization mentioned above can attribute its growth to multinational status information technology.

Information technology has helped the intensification of communications across the world as it has created reliable and far-reaching methods of interaction that have made the flow of business information throughout the world. Such methods have grown with time from simple mass media tools such as the radio, the TV, the newspaper, and magazines in the 1940s to the internet currently. The mobile phone has also revolutionized modern business as a modern business can relay information in real-time on mobile phones using the latest information technologies such as text messaging and mobile web.

Improvement of communication methods has led to access to business knowledge (people are able to know what is happening in any part of the world at any given time) which means business growth opportunities are enhanced. Many business experts see this as an opportunity for empowering consumers. Furthermore, multinationals like Wal-Mart have been abele to ship information as well as skills and knowledge across the globe using the latest information technology tools. This has enabled such multinationals to support and monitor their international business from one central spot. This saves the cost of business operations as well as improving business efficiency (Lawlor 2007).

The evolution of information technology is at its acceleration stage which means the sped of growth of new innovations exposes the business to risks and uncertainties (Information Resources Management Association and Khosrow-Pour 2002). Despite this, there is need for global businesses to maximize on the advantages of latest information technologies while reducing the risks significantly. Multinationals can incorporate new (emerging) and old markets through the use of such novel information technologies that will enable normalization of global computing podiums which will in effect allow for collaboration and sharing of new innovations.

This will lead a network of information sharing platform, what McAfee (2006) called Network IT (NIT). Using Network IT, Companies can access information with a lot of ease and at a relatively affordable cost. Network IT also has the ability to support virtual offices where web, tele as well as video conferencing and therefore takes away the need for time, distance and space in managing a business. Such Information technology based business practices will help in adding value to business and also (Stephens 1999). Network IT is also vital as it will help companies not only to share information but also to examine, scrutinize and evaluate business trends and information on real time.

While such technologies as Network IT is useful in information sharing between companies, individuals companies can utilize available information technology tools effectively to gain an advantage over their rival in the market. Such technologies include the Virtual Private Network, VPN. Such network allows companies to operate secured private commutation over public platforms. Combined with global wide area networks, companies will be able to establish seamless and wide area communication networks that can stretch to any part of the world. Because most companies have moved much of the business communication over to the digital technologies, this has created a new challenge: information load management.

To overcome this challenge companies will have to employ larger broad band technologies that help them to pass loads of business information efficiently and fast and as such reach markets quicker, gaining access to information faster and thus execute business operations before rivals (Lawlor 2007).

Technologies mentioned above seem to be more business process oriented. There are enterprise based information technologies that companies can engage for competitive advantage. These include Server Virtualization a technology that allows a company to segment one server into numerous sub servers and enable it to serve all the organization. Thus reduces the number of servers need in an organization to just one and also increases the efficiency that information is processed. Another of the valuable enterprise-based technology is the Radio-Frequency Identification, RFID. This technology helps to identify objects and is a valuable in managing of supply chain for companies.

Some of the companies that use RFID such as Nissan and Wal-Mart have the most efficient supply chains that ensures business efficiency product with RFID tags do not have to stop at ports for identification as the RFID tag can be read as the product moves along thus reducing the delivery and clearance time. Furthermore, this reduces cases of counterfeiting as well as accurate accounting and inventorying. Companies such as Walmart launch their completion over RFID.

Together with RFID, organizations can integrate all their operations such as financial, human resource, and supplies over Enterprise Resource Planning platform than enable a company to have all its operation under one system as opposed to having a separate system for every function. This allows for easier sharing of information as well as enhances business operation thus creating a business advantage (Robb 2007).

The face of life today has been drastically changed by modern technological innovations, information technology being one of them. Information technologies have had a profound effect on the nature and quality of life. The face of modern business has changed due to the influences of information technology so much that it is now seen as the engine that drives businesses today. So significant is information technology to business success that successful organizations, such as Wal-Mart and Nissan, have used IT innovations such as RFID, as the platform for establishing a competitive advantage over their rivals. Opportunities for growth present by IT tools are infinite and as such if well managed Information technology will take business to new heights previously unfathomed.

Reference List

Davenport, T., 1993, Process Innovation: Reengineering Work through Information Technology. Boston, MA: Harvard Business School Press.

Eatock ,J. et al., n.d. A Study of the Impact of Information Technology on Business Processes Using Discrete Event Simulation: A Reprise. International Journal of Simulation. Web.

Information Resources Management Association and Khosrow-Pour, M. 2002, Issues & Trends Of Information Technology Management in Contemporary Organizations. Pennsylvania: IDEA Group Publishing.

Lawlor, B., 2007. The Age of Globalization: Impact of Information Technology on Global Business Strategies. Web.

McAfee, A., 2006. Mastering the Three Worlds of Information Technology’, Harvard Business Review, Vol. 84, No. 11.

Robb, D., 2007. Top Five Technologies Being Tested This Year’, Computerworld .

Stephens, D. 1999. The Globalization of Information Technology in Multinational Corporations. The Information Management Journal, Vol. 33, No. 3.