How the Internet Transforms Organizations - Essay Example

Running Header: Article (Accounting) Student’s Name: Instructor’s Name: Course Code: Date of Submission: Question 1 The three areas that I have studied in the textbook are: ‘Managers: Key to IT Results’, ‘Strategic Planning’ and ‘Corporate Governance and IT’. I have chosen these areas because I believe that they are essential in management involvement with Information Systems/Information Technology. Managers: Key to IT Results I have chosen this area because it is crucial and relevant to the topic in very many ways. This area is essential in helping managers to achieve great results with the use of Information Systems/Information Technology. It provides valuable information about how to ensure that the future value and success of Information Systems/Information Technology as a manager and a leader. The area justifies some key reasons why managers must get involved in Information Technology and make it part of them. The area gives us insight on what managers must do so as to effectively promote the use of Information Technology within the organizations they head. An in-depth definition of Information Technology is provided and the roles of managers in relation to Information Technology are also discussed comprehensively. The consequences of managers not participating in Information Technology or meeting their Information Technology responsibilities are also outlined and explained. The area also discusses some of the major reasons why it is very important and essential for managers to understand Information Technology (Tracy, 2000). For any person to become a manager, it is essential that he/she possess certain crucial knowledge, skills and competencies so that they can be able to take up managerial positions and be effective as managers. Information technology has been said to include all the tools responsible for capturing, storing, processing, exchanging and using information. The major components of Information Technology are computer software, network related materials, databases and computer hardware. Computer software includes all the applications, programs and operating systems that are installed into computers. Computer hardware includes all the tangible and physical computer components such as mainframe computers, laptops and servers among others. Computer network devices include all the equipment that are used to access networks and the internet such as routers, modems, switches and hubs among others. Databases are primarily concerned with the storage facilities for data (Pearlson, 2006). Managers at various corporations such as at IBM and the Dell Corporation have proven to be effective and good decision makers. This is because they have embraced IT in their managerial roles. IBM for example was the first corporation to turn to e-business and this was after the management had already started using IT in its business processes. All these information is pertinent to managers. Mangers need to understand how all these components operate and how they are interrelated. They need to be knowledgeable about the functions and importance of each component and understand how they can use them to add value to their organizations. They should have the knowledge and skills to make wise choices about the types of Information technology infrastructure that they need to invest in. The article also points out that managers should gain knowledge and skills on how to use Information Technology infrastructure before they acquire it. The article recommends that they use a systems approach which involves the identification of their three major responsibilities. The first step is for managers to identify the appropriate opportunities to apply Information Technology in their organizations. This is crucial because a lot of funds are spent on acquiring Information Technology equipment. It is therefore the duty of managers to ensure that their organizations make a good return on such an investment. The second step involves smoothing the way for the successful introduction and adoption of Information Technology. A manager must analyze the business processes, reward systems, roles and responsibilities of workers and the decision making processes. Such an analysis will be important in determining whether it is necessary to change these processes so that they can be in line with the new Information Technology system. The final step involves mitigation of the risks associated with the system. The roles of Information Technology resources within an organization have been cited as capturing, storing, processing, updating and exchanging valuable organizational information. Because of these reasons, a manager should have the ability to ensure that Information Technology system, their associated functions and processes and the personnel responsible for entering and storing data are appropriately controlled. The manager should ensure that the Information Technology assets are protected against damage or loss. A manager is also responsible for ensuring that organizational data is protected from unwanted alteration, loss and intrusion. Managers should have all these skills and knowledge about Information Technology systems before they can be expected to manage their organizations effectively. Strategic Planning I chose this area because I believe that managers should have wide knowledge and skills about strategic planning with responsibilities for Information Systems/Information Technology before they can be appointed as managers in the first place. This area adequately defines strategic planning and explains it in the context of management. It also gives the benefits and shortcomings of strategic planning in great detail. The models for strategic planning are also outlined in the area and the main considerations before choosing a strategic planning model are also discussed. When discussing the models, the key components such as the action/implementation plan, goals, objectives and mission statement are also explained. The area is also important in understanding the knowledge and skills expected of a manager because it discusses the key mechanisms and processes involved in strategic planning. Two forms of planning, namely, short range planning and long range planning are also introduced for managers (Haines, 2004). Research shows that there is a great relationship between strategic planning and IT. Today, business and IT are interrelated so that they can work in cooperation and coordination in the modern competitive world. For this reason, for one to become a manager, he or she has to possess knowledge and skills in strategic planning. Manager must understand the relationship between strategic planning and IT. A keen look at the Food and Drug Administration (FDA) shows that if management appreciates the value of IT in strategic planning, then organizations are most likely to fully meet their goals and objectives. The business processes and functions at FDA had been failing for a long time before they got to integrate IT into their strategic planning procedures. With new IT systems, the organization has now improved in work processes and stakeholders close to it have attested to this. Strategic planning is mostly referred to as long-range planning. The main purpose of strategic planning is to help organizations to establish priorities so that it can work better towards achieving its goals and objectives. A manager must have the necessary knowledge and skills to create practical, workable and flexible strategic plans. He or she must also come up with implementing programs, know how to make adjustments to the plan when the need arises and be able to evaluate the strategic plan. Information Technology systems can be used as effective strategic management tools. Planning for an organization involves the collection, organization, repackaging, storing, using and disseminating of information. All these processes require a reliable and efficient Information Technology infrastructure that can perform the duties effectively. It is the responsibility of managers to ensure that they plan for their organizations’ activities in good time. Apart from having the necessary knowledge and skills for planning, a manager should also be able to use Information Technology in planning. Planning experts say that a strategic plan must reflect the feelings, thoughts, wants and ideas of the managers that develop it. This therefore means that managers must have knowledge and skills that will be reflected in the strategic plans that they formulate. A manager must also possess the ability to coordinate all the different units within the organization to work together in harmony towards fulfilling the goals and objectives that have been stipulated in the strategic plan (Allison, 2005). Corporate Governance and IT I chose this final area because it is important in the understanding of the roles of Information Technology in corporate governance. The importance of good corporate governance policies and practices to organizations and nations at large cannot be overlooked. Research has shown that good corporate governance practices contribute to competitiveness and spur economic growth by facilitating the corporate access to capital markets. Corporate governance issues require the policy makers, planners, market participants and regulators to have vast knowledge and skills in Information Technology. Information Technology is essential in corporate governance (Davidson, 2004). All the key players in corporate governance issues must have the necessary skills and knowledge in Information Technology. All the parties concerned with corporate governance are required to have corporate social responsibility. This calls for them to take care of the economic and social welfare of the communities that they serve. According to the CSR Journal, stakeholders have taken up more socially responsible capacities as a result of IT. Investors today, both domestic and foreign, are keen at observing the way corporations treat their needs and demands and take care of their interests. Such investors are willing to pay huge premiums to the companies that provide financial transparency, information disclosure, respect for the rights and interests of shareholders and adherence to good board practices. This means that the companies that are well governed are in a better position to fulfill their social, environmental and economic responsibilities. Such companies are also better placed in contributing to sustainable growth of the economy. Companies can only be able to achieve this when there are proper Information Technology structures in place to ensure that they can realize their goals and objectives. If the corporate governance practices at companies are improved, then decision making processes are also improved and simplified. This enhances the efficiency of the business and financial operations of the company. The accountability systems of companies are greatly improved with better corporate governance. This minimizes the risk of fraud and avoidable mistakes. Such a system also ensures that a company remains compliant to relevant laws and regulations. This calls for the management at different corporations to be knowledgeable and skilled in the use of Information Technology systems. Managers must appreciate the value of Information Technology and what it can do to improve corporate governance. They must be able to apply and invest in good Information Technology infrastructures that are cost effective and efficient (Ernsthal, 1992). Research has shown that there are several principles of strategic planning. Each principle has been strengthened as a result of Information Technology. The Russia Corporate Governance Manual introduces the concept of IT in corporate governance by highlighting the importance of IT in corporate governance. IT has led to the improvement of corporate governance in Russia. Managers should therefore embrace IT because those corporations that have done so have proven to be effective and efficient. References Allison, M. & Kaye, J. (2005). Strategic Planning for Nonprofit Organizations. 2nd edition. New York: John Wiley and Sons. Davidson, B. (2004). Breakthrough: How Great Companies Set Outrageous Objectives and Achieve Them. Chicago: Elsevier Limited. Ernstthal, H. L. & Miller, J. A. (1992). A Sharing of Expertise and Experience. Washington, DC: ASAE. Haines, S. G. (2004). ABCs of strategic management : an executive briefing and plan-to-plan day on strategic management in the 21st century. Michigan: Free Press. Pearlson, K. E. & Sanders, C. S. (2006). Managing & Using Information Systems: A Strategic Approach. 3rd edition. New York: John Wiley & Sons, Inc. Soden, V. J. (1977). Comprehensive Managerial Planning. New York: John Wiley and Sons. Tracy, B. (2000). The 100 Absolutely Unbreakable Laws of Business Success. Berrett: Koehler Publishers. Question 2 As the strategic manager (CIO) of a medium-sized organization, I am convinced that an e-business approach can provide the company with significant advantages. In this section, I have investigated and documented the arguments to be put forward so as to convince the CEO of the company that an e-business approach is advantageous to the company. The arguments are explained with sufficient details that will provide insight to the CEO about the importance of an e-business approach. E-business has been explained to mean the application and use of information and communication technologies to support and enhance all the activities and processes of a business. E-business may also be referred to as e-commerce. E-business involves the conduction of business on the internet. This does not only imply the buying and selling of goods and services but also the collaboration with business partners and servicing of customers. Any business run or supported by the internet may be referred to as an e-business. E-business simply implies electronic business. These are the businesses that utilize the internet technologies so as to improve profitability and productivity (Beynon-Davies, 2004). The internet can be used to carry out many different functions that can improve the productivity of any business. Such functions include acquiring of products and supplies, procurement, marketing, customer service and reduction of money and time spent on business processes. This means that an e-business approach has numerous advantages to any company. One of the advantages of e-commerce to a business is the fact that it creates a worldwide presence for any business. This is considered the greatest advantage of e-business. Any business that utilizes e-commerce can enjoy both nationwide and worldwide recognition. One of the first companies to use e-business was IBM and it has been able to collaborate with its major business partners and also service its customers online. This has ensured that the company has flourished in business and remained among the top in the business world. Other companies that followed suit such as the Dell Corporation have also realized high profits since they introduced e-business to their operations. All this has been possible because the internet is virtually accessible from even some of the remotest places in the world. People from different continents and countries can be aware of the existence of a business and know about its products or services (Li, 2003). Another advantage of e-business is that it can ensure cost effectiveness in the promotion and marketing of a company’s products and services. This is because advertising products or services via the web can ensure that they reach a worldwide audience at the least cost possible. There are new advertising techniques available online that allow businesses to pay only for advertisements that are actually viewed by web users. Such an example is the ‘pay per click’ service that is available on the internet. Such measures ensure that businesses use the least amount of funds to advertise their products and services while at the same time reach a very wide audience (Canzer, 2006). E-business is also advantageous in the sense that it can develop a competitive business strategy. For firms to have a competitive advantage over others in the business, they must have a competitive strategy. It is almost impossible to maintain a competitive advantage and earn profits without a competitive advantage. One such strategy that can be used by companies is the use of e-business. Surveys have shown that companies that employ e-business are more profitable and productive than those that do not use e-business. Selling products and services online has proved to be one effective way of ensuring that companies reach a wider audience as opposed to those companies that do not use e-commerce. E-business has also ensured that companies offer better services to customers. Customer services have greatly improved as a result of e-business. Companies that are available online can communicate to their customers’ one on one and allow their customers to air their feedback, comments, views and suggestions. Companies now have customer service attendants that are readily available to answer the queries of customers. The customers are now encouraged to enquire more information about goods and services that they are interested in. They can receive information about prices, preferences and availability of certain goods and services. Payments can now be made online and customers can simply give their physical addresses and have the products shipped to them directly without them leaving their homes. All these services are a sure way of ensuring that companies make more profits and make their service and products more marketable (Kidd, 2000). The amount of time and money spent in business processes can also be greatly reduced with the use of e-business. Traditional business procedures can now be conducted at the least cost possible. Electronic means have now simplified, eliminated and reduced traditional procedures. Some of these costs including mailing costs which involves the use of paper, postage and staff. Nowadays, bulk letters can be sent in the form of e-mail. With the existence of the internet, there is no need to have a physical location or office premises. The cost of maintaining an online site is much cheaper than paying rent for a physical location. E-business has therefore ensured that companies reduce the costs of conducting certain business processes. This also means that availability restrictions are removed. With e-business, customers do not have to be in the same physical location as the business. Transactions can still take place even without the business and customer meeting directly. The time restriction is also eliminated. Without e-business, a company has opening and closing hours whereby business cannot be conducted outside of these hours. With the introduction of e-business, a company can transact business with it customers twenty four hours a day since it is available throughout (Jackson, 2003). Customers today are only interested in quality and value-added products and services. This includes timely and efficient communication and service delivery in a quick and easy manner. With e-business, a company can ensure that its interactions with the customers are speedy and convenient. Companies can also ensure that they are more customer-friendly and that they improve their business dealings with e-commerce. The flow and exchange of information is also simplified and made to be speedy with e-business. The rapid growth of technology has seen businesses adopt new ways of dealing with their customers and associates. Businesses can now reach new markets and prospects locally and internationally (Amor, 1999). With more and more people embracing the use of the internet, businesses are gaining advantage in the sense that customers are readily available online. It is just up to the businesses to do a good job at marketing themselves and wait for the customers to respond to the advertisements by choosing to buy the advertised products and services. Ordering processes can now be streamlined to ensure that orders are taken online. Manual paper work that was time and energy consuming can now be eliminated because businesses can implement online ordering and receiving systems. Communication and telephone costs can be cut because the internet allows the use of faster and cheaper communication options. Communication can now be done over very long distances, which can be very expensive when using other means such as post office mails or telephones. Today, customers have the option of chatting live with business staff and raise their queries. They get to receive immediate and instant feedback from the staff at the help desk of any business (Canzer, 2006). In conclusion, the advantages of e-business are numerous. Research shows that businesses that have embraced e-business are more profitable and productive than most of those that still use traditional means to conduct their businesses. Every business is unique and needs to identify the type of e-business that works for it. E-business has ensured that speed of operations has been much faster and that efficiency and quality of service delivery has been improved. E-business can do so much for this business and these include creating a larger market base, offering cheaper forms of advertising, creating a worldwide presence and removing availability and location restrictions (Kalakota, 2001). References Amor, D. (1999). The e-business (r)evolution. Upper Saddle River: Prentice Hall. Beynon-Davies, P. (2004). E-Business. Palgrave: Basingstoke. Canzer, B. (2006). E-business: strategic thinking and practice. USA: Houghton Mifflin Company. Jackson, P. J., Harris, L. & Eckersley, P. M. (2003). E-Business Fundamentals. New York: Routledge. Kalakota, R. & Robinson, M. (2001).E-business 2.0: roadmap for success. USA: Pearson Education. Kidd, P. T. (2000). E-business: key issues, applications and technologies. Amsterdam: IOS Press. Li, F (2003). What is e-business?: how the Internet transforms organizations. Malden, MA: Blackwell Publishing.   Read More