The Role of Information Technology in Business

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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. But it is a common misconception that these benefits should apply to the Information Technology system itself. In fact, these benefits should reside with the business function and should be measurable in terms of business output. 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. 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 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 - 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.

Role of Information Technology in Business
By Joanne Cichetti, eHow Contributor
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Information technology is all about storing, manipulating, distributing and processing information. Over the past few years, IT has replaced the conventional modes of businesses with innovative technological tools. In addition to the increased output and efficiency, IT has introduced new concepts such as e-commerce.

1. Productivity
o

Technological applications, such as relational database technology, computeraided designing, word processing, spreadsheets and other software programming, increase productivity of businesses.

Significance
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Business corporations maximize their commercial advantage by making the right use of IT tools. For instance, Michael Dell, founder of Dell Inc., introduced the online selling concept for personal computers. Today, customers around the globe order Dell products from the comfort of their homes via the Internet.

Monitoring
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IT is used for monitoring areas of the company that are not utilizing resources efficiently. For instance, Dell made use of real-time inventory and supply monitoring to produce only that number of computer systems that were demanded by Dell customers, reducing the cost of overproduction.

Business Performance Management
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According to bestpricecomputers.co.uk, BPM is defined as a management culture, which helps businesses to optimize their performance by analyzing processes using applications like OLAP (Online Analytical Processing), and EIS (Executive Information Systems).

E-commerce
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E-commerce is buying and selling services and goods over the Internet. Online operations reduce the time and personnel required for business processes. It also reduces costs in areas like labor, document preparation, telephoning, and mail preparation.

Read more: Role of Information Technology in Business | eHow.com http://www.ehow.com/facts_5977213_role-information-technologybusiness.html#ixzz1U9I885IN

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