Organizational information technology budgeting criteria and solutions - Essay Example

?Organizational Information Technology Budgeting Criteria and Solutions Introduction Information technology has assumed a large part in the function of modern organization and businesses. This applies equally across the board whether public or private institutions are concerned. The domain of information technology has come to take up from the most basic of functions to the most advanced of functions executed in the organizational structure. In addition, information technology has impinged the functions of most basic level employees to the most senior levels of management in any organization. The modern economy has a lot to credit information technology with. However, the management of this vital tool for the organizational structure is a complicated process depending on the particular constraints in place (U. S. Department of Energy, 2010). Information technology requirements tend to differ from one organization to the next even if the basic business functions are more or less the same. This tends to happen as information technology requirements are differentiated on the basis of an organization’s internal factors as well as external constraints. The choice of particular systems to use and the choice to embed the systems to certain levels of depth in an organization all require meticulous attention to detail. It must be taken to note that information technology is not limited merely to computer equipment or more aptly hardware. Instead, information technology, when applied to an organization’s business support functions, refers to hardware, software as well as the manning required to run the show. The budgeting aspects of information technology often fall to deaf ears since the budgeting authorities may not be as acquainted with information technology as desired. In most organizations, information technology budgeting comes through the accounting office where there is little appreciation for information technology constraints. There is a constant need to spend on all three aspects of information technology in order to keep the modern organization up to date and abreast with recent developments (Law, Leung, Rosanna, & Buhalis, 2010). This paper will attempt to look into various aspects that concern budgeting in relation to information technology structures in a number of organizations to bring out the relevant constraints and fitting solutions. Budgeting Criteria The three basic tenets that are used to construe the information technology budgets for most organizations can be classified broadly as hardware, software and human resources. Almost all organizations that have some kind of an information technology setup tend to have some proportion of these three components working together to create a complete information technology support system. The proportion of each of these components tends to differ from organization to organization especially when budgeting concerns are explored. The components are discussed in greater detail below under the appropriate heads. Hardware Hardware is essential to the functions of any information technology setup. Some quarters might argue that hardware in the hardcore sense is fast disappearing from organizational information technology culture but in effect its proportion is changing. This change is occurring as more and more organizations are pursuing cloud computing solutions that are far more flexible and cheap when compared to conventional information technology setups for organizations. In conventional information technology setups, the organization tends to procure most pieces of information technology equipment that it uses except for larger network equipment that connects it to the World Wide Web. The procurement typically tends to include basic computing equipment such as keyboards, mice, towers, monitors as well as more advanced equipment such as barcode scanners, weighing devices, various kinds of flow meters etc. Again, the nature of the advanced equipment is determined by the nature of the business operations. However, the nature of the basic equipment tends to remain the same no matter what kind of organizational information technology setup is looked into. In recent years, there has been an overwhelming move to adopt cloud computing solutions in order to reduce the need for more sophisticated forms of basic equipment. As computer technologies become more and more sophisticated, there is a constant need to upgrade the basic hardware structure in order to use more advanced programs. The leaps in technology are often exponential and so the upgrades required to deal with them are just as expensive. For example, a computing architecture running Microsoft Office 2003 cannot be expected to run Microsoft Office 2010 just as well. Therefore, in order to run the new software bundle the existing hardware architecture would have to be replaced since upgrades would not be possible. To avoid such issues there has been a surging move to adopt cloud computing solutions where the hardware required to display applications is minimal. The basic hardware functionality is handled by a remote server anywhere around the world which deals with the major hardware aspects of the information technology setup (Gorroll, Simon, Tripathi, Ascenzo, & Bates, 2009). While the use of cloud computing offers cheap solutions, there are currently a number of problems associated with using cloud computing. Cloud computing may be cheap at the moment but could its reliability be guaranteed? Consider, for example, a bank that relies on large amounts of sensitive data to function. A localized hardware solution would be expensive since the bank would have to procure the required hardware in terms of servers, network equipment, firewalls etc. The cloud computing solution would be cheaper since the bank would have to procure only basic information technology equipment to display information from a remote server. However, in case that the remote server crashed or was unavailable, the bank’s functions would be hurt tremendously leading to a loss of business over the longer run. In addition to this, there is the ever present problem of privacy (Chang & Wang, 2009). Cloud computing may present cheaper solutions but what would the guarantee to privacy be through cloud computing solutions? The basic as well as advanced information technology equipment for any organization is totally under its control since there is physical proximity. This cannot be said of cloud computing solutions where the remote server may be located on the other side of the globe. Since a localized control of the information technology setup allows the organization to choose who accesses its data banks, there is a far greater amount of privacy available. However, since the cloud computing solution is located out of control, there are myriad issues as to its access. Since a loss of privacy could result in loss of business so most organizations dealing with sensitive information still choose to buy and upgrade advanced hardware so that information is kept well secured (Hashim, Alam, Siraj, & Saedah, 2010). This trend stands true for information sensitive organizations but other smaller businesses are pursuing cloud computing. The use of cloud computing aids in the reduction of information technology costs to the overall organization and helps to reduce the budget required for information technology support. Software Software forms an essential part of an organization’s overall information technology setup. An organization often needs to upgrade its overall hardware setup in order to deal with advancements in software. Software is a highly dynamic part of the information technology domain since it is constantly evolving and new updates and patches are nearly always available for larger software suites in use. However, these updates typically cost the organization money so there is careful consideration put to choosing the right updates to purchase and install. Popular working suites such as Microsoft Office might have thousands of updates in a typical year so figuring out which patches and updates to procure is a tough and demanding job. Another major concern behind updates is the fact that security vulnerabilities may exist without the right patches being installed. In order to make the organization’s security impenetrable it is necessary to invest in the right kinds of software updates. Moreover, certain organizations may also choose to upgrade particular software that they use such as ERP systems (Wang, 2010). For example, in case that an organization decides to take over procurement as a business function, it would require the addition of procurement modules to its existing ERP system. This again would cost the organization large amounts of money. Given these constraints, it can be seen that the domain of software can be divided broadly into new purchases and upgrades versus conventionally required updates and patches. The information technology budgeting required for software has to take into account what kinds of updates and patches are required to deal with routine as well as upcoming business functions. Typically, organizations take good time to consider upgrades since they cost far more than regular patches and updates. Moreover, it is customary practice to take information technology personnel onboard before such upgrades are pursued since a large amount of technical expertise is generally required. Finding, acquiring and implementing the right software solutions are the only real guarantee to a workable and lasting information technology setup for any organization. The right software solutions can become the essential tools for an organization while loosely fitting solutions can become more of a problem than a solution for the information technology setup in an organization. Human Resources It might not seem obvious but human resources are just as essential to the information technology setup as the other components for the system are. Manning is required under all circumstances for information technology setups no matter the amount of automation involved. This remains true for basic information technology setups in simple organizations to the more advanced and sophisticated manufacturing systems in larger businesses. Even though human resources are essential to the information technology enterprise but this component is often neglected in most organizations. This stands all the more true for organizations that do not involve a high amount of expertise in the information technology domain. However, organizations where sensitive information is dealt with or where large losses are anticipated due to information technology failures, the human resources are typically well kept. Conclusion Information technology is essential to the function of the modern organization without any doubt. In this sense, the information technology setups can be classified broadly as being based of hardware, software and human resources components. All of these elements need to be kept in line in order to ensure that the information technology setup continues to function as desired. References Chang, T.-H., & Wang, T. C. (2009). Using the fuzzy multi-criteria decision making approach for measuring the possibility of successful knowledge management. Information Sciences 179, 355-370. Gorroll, A. H., Simon, S. R., Tripathi, M., Ascenzo, C., & Bates, D. W. (2009). Community-wide Implementation of Health Information Technology: The Massachusetts eHealth Collaborative Experience. J Am Med Inform Assoc 16, 132-139. Hashim, F., Alam, G. M., & Siraj, S. (2010). Information and communication technology for participatory based decision making. International Journal of Physical Sciences 5(4) , 383-392. Law, R., Leung, R., & Buhalis, D. (2010). Information Technology Applications in Hospitality and Tourism. Journal of Tourism and Marketing 28. U. S. Department of Energy. (2010, September). 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