Impact of IT on Business Environment - Coursework Example

Impact of IT in Business Environment Introduction The impact of IT on global business cannot be disputed. The business landscape has been shaped by the emergence and use of IT. It has shaped strategies and has created options and great opportunities for managers that have influenced the outcome of business (Price, 2003). The use of IT in organizations has enabled these organizations to reduce costs, gain new markets and achieve greater competitive advantage as regards that provision of goods and services. IT provides a platform for business to be more efficient and effective in how they conduct their business. Thus, the aim of this paper is to analyse the impacts if IT in business environment, and how IT adds value to organisational requirements. Literature review IT and investment The technological progress that has been made with the advent of computers is huge. From powerful computer chips to communication technologies such as face book, the i-pad and i- phone (Glaser, 2002). These inventions and technologies serve to increase investment in products that serve this market. Software companies like Microsoft and apple are ever in the quest of finding and researching on technologies that make life easier and fuel economic growth in the developed and developing countries (Schronberger and Lazer, 2007). Impact of IT on education Incorporating IT in the education system has enabled students in learning and in getting educational resources that are other wise not available in books. Application of software in instruction has enabled students to learn interactively in class. New technology allows students to think analytically and critically. This has made learning more interactive as students as well as the teachers interact freely in class (Schronberger and Lazer, 2007). Internet connectivity has made it easier for students to interact with other student in different parts of the globe. Teachers and the administration has also not been left behind, this is because information technology has been used to improve the roles of teachers and administrators in the educational process. Information technology has eased the burden on teachers of record keeping and has increased their professional development by taking long distance learning, which is readily available via the internet (Mahapatra, 2005). The most important contribution that an institution of higher learning should provide is skills and knowledge that meet the environmental challenges occasioned by the twenty first century social and economic needs. A high quality learning experienced designed to enable students maximize their potential in their learning experience. Australia has a high number of international students from all over the world. The introduction of an innovative approach in teaching in Australian schools has made students exercise levels of critical thinking because they now they are able to apply IT in their learning and group activities (Shah, 2003). Impact on economy It is said that IT is the global economic driver because it has led to the improvement in the quality of life for many people around the globe through the stimulation of economic growth (Price, 2003). The benefits of new technologies help in job creation for many unemployed people. This is because with new technology requires new skills to be able to effectively operate it and this therefore requires the creation of new jobs. Impact of IT on human resource Human resource management is very critical to an organization. Sometimes recruiting for organizations can be difficult because getting to find people with the right skills is a big undertaking for many organizations (Fountain, 2001). Australia is a small resource based economy with a low population and its geographical location is in the remote south pacific (Grundspenkis and Kirikova, 2002). IT has made the work of recruiting easier because human resource managers can recruit personnel from any part of the globe using the internet. In addition, the technology of broadband a person can be able to work from any location without necessarily having to change location. IT and health care Australia has long had the National Health and Hospital Reform Commission, which had the agenda of adopting e-health as part of the reforms in health care in Australia. The use of information systems by medical professionals will improve the Australian health setting. This is because medical will now be able to have shared data which they can use to improve on service delivery to Australians be it in emergency care or in any other palliative care that may be required (Glaser, 2002). IT and communication IT is able to bring information and communication about the Australian politics, economics and social issues to people. It has made people change on how they create and share information (Grundspenkis and Kirikova, 2002). This is because wit the many media available because of technology. Service delivery has also changed because as people and businesses alike become embedded in the information a new way of communication and passing of information has to be created. The traditional methods like newspapers are also catching on with using IT as part of their way making news reach the masses. Many dailies are now having online versions of their papers. Opportunities for IT Construction The construction industry has three basic activities that it engages in engineering construction, residential building and non-residential buildings. This part of the Australian economy includes manufacturing, retail and wholesale, finance industries and supplying components in construction. The demands for this industry necessitate the use of IT in this industry. The construction industry is said to have supported the Australian economy for the year 2009. The multiplier effect of the construction industry is far higher than the financial and retail sector. The impact of information technology on the construction industry is high speed connecting networks, which provide effective and efficient communication between the field operators and the main office. The shift from manual operations to digital operations will reduce time that is used in operating manual processes and this will impact on construction. In addition, web operating systems that integrate the organizations increases efficiency that allows for better management of projects and managerial oversight (Price, 2003). Service industry These are the fastest growing components in the Australian economy. Service industry includes the tourism sector, which contributes greatly to the economy of Australia. This industry has a great social and economic impact, which generates employment and contributes to the GDP of Australia (Shearman, 2006). The banking industry is also a part of the service industry, which has seen tremendous gains because of IT adoption and usage. The importance of information technology in current business practices cannot be underscored. IT in the service industry leads to competitive advantage because service innovation is known to increase competitive advantage. Transport This contributes greatly to Australia’s economy because of the taxes that government generates from this sector. This sector includes the airports, ports, rail and road. The impact of information technology and its role in transport development. The development of transport logistics information has influenced how transportation is managed (Fountain, 2001). Hardware and other transportation logistics such as tracking devices have helped in making IT important in the transport industry. Information technology logistics enable users to determine the best routes through making schedules; optimize transport plans in a multi period daily schedule and utilization of web hosted planning in improving transportation involving ship and air. IT helps logistics managers make decisions regarding fleet management, inventory and warehouse systems and technology transport options (Nijkamp, 2004). IT, science, and innovation Science and innovation has opportunities for research and development, which affects the Australian industry. Great innovations that help to make life easier have need for IT (Grundspenkis and Kirikova, 2002). IT helps in managing information and helps in keeping records. Science and innovation generates new knowledge for sustainable development. IT helps in the promotion and awareness of science in society. Technology provides solutions for some of the problems that exist in our planet (Mahapatra, 2005). Government The government is an organisation that utilises resources in the country today. It employs a majority number of people and provides other essential activities to people. The need to manage information and communication in government provides IT with a platform of usage in government (Garson, 2005). IT enables government to come up with E-government resources and initiatives that improve internal efficiency such as electronic records management, online background investigation, e training and a one-stop government resource centre (Schronberger and Lazer, 2007). Value of IT in business in e-commerce E-commerce is carrying out business transactions with computers using networks. This is done mainly through digital communications. The digital networks include smart cards, electronic funds transfer and the internet (Grundspenkis and Kirikova, 2002). Personalizing Many successful companies conduct their businesses using the internet - from online newsletters to shopping online. IT helps such companies in personalizing the features on their sites to make them more attractive and easy to use. Personalization enables companies to create value not only for themselves but also for their customers (Price, 2003). Technology enables businesses to be able to draw information from sources and best practices that enable data sharing, mining and gathering. As the twenty first century unfolds, many companies are now transforming themselves into global businesses powerhouses through e –commerce. This makes information technology a powerful resource for business. Wide reach and market E-business has flourished with the advent of IT. Many otherwise unreachable markets can now be accessible with just a click of a finger. Markets that were virtually unreachable because of distance and other restrictions cannot be reached. As the world has become global social networking sites such as face book, twitter and flicker provide many e- marketers with a large market to market and advertise their products; many news agencies have these social sites to get news across. In the beginning of the year when Haiti was hit by the devastating earthquake many relief efforts were coordinated using the internet and hence IT. Market has been transformed from brick and mortar to being a virtual one. Value of IT in outsourcing Many companies have an arrangement with other companies to provide services, which may sometimes have been provided for in-house. IT therefore is one of the services that a company may seek the services of an outside provider. Information technology services are sometimes regarded as fundamental in business management (Mahapatra, 2005). The company may outsource for the installation of IT services to planning and servicing of the workstations and network. Technology influences competitive advantage because it changes the activities in the value chain of an organization. Technology supports both the primary and support value activities. Information technology supports computer-aided software and design, which are useful in the support activities of an organization. If a firm specializes in only one of the value chain activities that it can outsource those that it does not have; based on the strengths and weaknesses of each activity (Garson, 2005). Outsourcing helps businesses in focusing on its strengths alone. This because outsourcing helps businesses in eliminating practices and activities that are not its core competency, this further leads to increased productivity by businesses. Not all businesses are IT oriented so outsourcing IT capabilities from outside the organization the company is able to handle its core business efficiently. IT requires research and development so that it can do the capabilities for which the user needs it to do and this requires expertise but this process is reduced when these same capabilities are sourced out of the company (Shearman, 2006). Outsourcing IT is cost effective and provides the company with a wide pool of talent to choose from. The cost of operation is reduced when IT is sourced from outside the organization. This is because it lets the IT support provider become the professional. The company benefits from the large pool of engineers and experts who are there to provide the diverse skills and expertise that are needed in IT infrastructure. This level of knowledge and technical skill may not necessarily be available in house. IT outsourcing in Australia is well established because large, medium and small organizations have resorted to this practice. Many organizations though are selective in how they outsource because of budgetary constraints in IT. Partnerships have therefore been developed to make IT outsourcing successful (Shearman, 2006). IT and off shoring Off shoring is shifting business functions from one country to another country (Shah, 2003). A business may move its operations to another country because of many different reasons some being cost reduction and the economic conditions (Nijkamp, 2004). The IT industry has created innovations that driven the cost of communication down. The availability of technology anywhere and at any time has brought about the shift in prices. With globalization and organizations like the World Trade Organization, goods are available in the global market and so are labour. IT as a player in the global market is also part of this in off shoring (Garson, 2005). Offshore g in the IT industry take place in the following form, software testing, IT consulting, computer components manufacturing etc. off shoring helps companies in reducing costs and so Australian companies as other companies in developed nations will shift operations in areas that provide cheap labour and highly skilled workforce (Shearman, 2006). Low wage countries develop vibrant export oriented software and IT service industries and enables them attract vibrant talent and work quality (Garson, 2005). IT and software development Software development is creating computer base functions. Innovative technology is used to provide solutions in different industries (Shah, 2003). Software development requires IT a solution providers that use application development to optimum use. IT has made applications such as data access and transaction processing to be easier for many industries and companies. Conclusion Information technology has played a major role in the way business operates and tries to define the future of business. IT has created a business environment that is borderless in that globalisation and international economies are interrelated with local economies and business ensuring that both sides of business are successful. Moreover, IT has increased or created value to organisations in different facets ranging from quality of products to efficiency of the entire process. References Fountain, J.E. 2001. Building the virtual state: information technology and institutional change. New York: Brookings institution press. Garson, D.G. 2005. Public information technology: policy and management issues. North Carolina: Idea group Inc. Glaser, J.P. 2002. The strategic application of information technology in health care organizations. Cambridge: John Wiley and sons. Grundspenkis, J and Kirikova, M. 2002. Information systems development: advances in methodologies, components and management. New Jersey: Springer. Mahapatra, B.C. 2005. Information technology and education. Sydney: Sarup and sons. Nijkamp, P. 2004. Location, travel and information technology. London .Edward Elgar publishing. Price, C. 2003. Information technology: certificate 1. London: Max Johnson. Schronberger V.M and Lazer, D. 2007. Governance and information technology: from electronic government to information government. Boston: MIT press. Shah, B. 2003. Information technology and education. Mumbai: Kitab Mahal. Shearman, J. 2006. Information technology. New York: Career FAQs. Read More