Role of Information Technology within Business Practices - Coursework Example

INFORMATION TECHNOLOGY Executive Summary The increasing role of Information Technology within business practices creates growing interest among students and scholars. Within my education and working experience, I have repeatedly used the internet without understanding that it is a part of the concept Information Technology itself. Information Technology is actually a wide concept and includes many technological branches that cannot be elaborated within a single paper. In this paper, I will focus on the concepts of E-Business and E-Commerce and how it had affected the business world, locally and globally. I have divided my explanation into two large segments, which first describe the importance of the concept and second describe the roles of the concept. I discover that E-Business and E-Commerce have significant and increasing importance toward local and global business and their roles are receiving tremendous support from various private and government entities throughout the world and continue to grow. Information Technology (E-Business and E-Commerce) I. My Work and Educational Experience Within my line of work, you could say that I have great needs over the internet. It is my real-time business communication tool, my promotional utility, my library and even my personal advisor. Today, the internet has been an inseparable part of business. Most of us have heard the terms E-Business and E-commerce. But to what extent do we understand the concept and its role to the business community? In my previous study of the subject, I discovered that I know a lot less then I had believed. Within this essay, I will describe how I learn about E-Business and E-Commerce and their role within the world of business. As I surf down the internet, I found that E-Business and E-Commerce are actually parts of the concept ‘Information Technology’. The term information technology generally refers to the hardware and software used to store, retrieve and manipulate information. It is an operating system that generally consist of servers, databases, web serving software (‘Definition of information technology’, 2005). Both terms (E-Business and E-Commerce), are likely to be mixed-up and used interchangeably over everyday conversations, while in fact, the term E-Business has a slight broader meaning than E-Commerce. E-Commerce refers to the activities of buying and selling products or services trough the internet. E-Business, on the other hand, refers to the conduct of business on the internet, which consist of not only buying selling, but also servicing customers and collaborating with business partners (‘E-Business Definition’, 2005). Next, I will describe what I have learned from various sources of information. The elaboration would describe how the world of business admits the growing importance of E-Business and E-Commerce, and also include discussion of several roles of E-Business and E-Commerce in local as well as global business environments. II. The Importance of E-Business and E-Commerce II.1 Choice of Embarking on E-Business My basic understanding of why people are embarking on the E-Business can be elaborated trough these corporate websites. In its webpage, Solutions Consultant describes, that the choice of having a company website or not is not a technology decision. It is a business decision. The decision is a strategic management movement to ensure future development of a company (‘E-Business Overview’, 2004). There are actually several common reasons why the trend is so quickly developed. Large companies launch a web site as an extra marketing channel to increase sales, but we don’t actually have to sell anything to benefit from the internet. For example, I’ve learned that factories in different parts of the world use the internet to trade important information almost instantly. Overall, I learned that the internet is a form of competitive advantage that could be developed to safe and produce millions of dollars for companies who know how to properly take advantage of the technology (‘What is E-Business’, 2004). II.2 Knowledge Market Throughout my college years, I have learned that the most valuable trade commodity in the world today is actually information. Managers are willing to pay millions of dollars in order to ensure that their companies are ahead in terms of communication technology. Smart and young people from all over the world build millions of dollars worth of business in a comparatively very short time, selling information. This is possible due the existence of the internet. One article in the Guardian Unlimited stated that the easiest commodity that could flow trough the internet is actually information. There are companies who make their living by providing an infrastructure on the internet where consultant and managers can buy and sell information as they please. The refer to it as Nasdaq for knowledge. As the knowledge market grew, also the importance of internet and E-Business (‘Capitalizing’, 2002). II.3 Global Development of E-Commerce In my opinion, the best way to describe the importance of E-Business and E-Commerce is by referencing on international articles and international report on Information Technology development. My international report reference is the United Nations E-Commerce and Development Report 2002. Within this report, I discover that the use of internet in business is increasing rapidly, despite the fact that within that year -2002- international business are having a little downshift in its development. The report stated that in North America (and also most of other regions in the world), the economy was not in its best condition. However, the share of online transactions in total B2B sales is growing quickly on both sides of the Atlantic, estimated to be 20% in 2006. International dialogues have been made to address the internet-induced changes in the global economy. The condition represents a major shift of global business to the on-line environment (‘E-Commerce and Development Report’, 2005). II.4 WTO on E-Commerce The second global organization reference that I have read is about the International meeting held by the World Trade Organization. Repeated discussions on the matter of E-Commerce in the WTO have shown me that the issue has become global interest rather than America’s singular effort to promote less trade barriers. Recent discussion has been made to decide whether E-Commerce should be considered trade in goods or services. Developing countries also argue that liberating E-Commerce to soon will not be fair for unprepared economies around the world. They believe that there should a period of time where developing countries could develop the competitive value of their E-Business before liberalizing global E-Commerce (‘E-Commerce Summary’, 2004). In previous meetings, the organization has produced the Doha Ministerial Declaration – November 14, 2001-, which stated that E-Commerce creates new challenges and opportunities for trade members of the WTO, at all stages of development. The declaration mentioned that WTO realizes the importance of creating and maintaining an environment, which will encourage the development of E-Commerce. The General Agreement on Trade Services (GATS) is now in constant interaction with domestic regulation in order to create regulations that would satisfy international trade society (‘Berkey’, 2002) II.5 Global Issues Harold Wohlander (1997), the Director of Research in ActivMedia stated that only four years after internet is available for commercial growth, the technology has blossomed into a vibrant marketplace. In 1997, three-fourths of the trade was conducted by American companies, but Wohlander stated that rapid expansion would ensure the development of E-Business around the world. Larry Irving (1997), the Assistant Secretary of Commerce for Communication and Information stated that the risk of investing in E-Business is great, due to the explosive pace and unpredictable nature of the technological development. However, successful examples are abundant and new business can follow their lead. One of the most popular examples is the Amazon bookstore. Amazon .com is now valued at $ 500 million. The facts stated above display the increasing importance E-Business and E-Commerce. III. Roles of E-Business and E-Commerce in Local and Global Business III.1 Historical Background of IT Business From a web page designed by Pricewaterhouse Coopers, I discover that Information Technology is actually a lot younger than the Computer Technology. In the 1970’s, the need for timely, accurate and reliable information helps the Information Technology to spread widely. But it was the ‘small computers’ discovered in the 1980 that increases the impact of Information technology toward government and business. Today, the technology has developed into corporate weapons to face competitors. The role of the IT business as a strategic advantage of is widely recognized (‘The Importance of’, 2000). III.2 E-Business in Small Business Another study by Magal & Levenburg (2005) reveal surprising result regarding the role of E-Business in small business. The study provides evidences that E-Business has relatively limited impact toward small business. The study then provide me with the understanding that small business does not embark on E-Business because lack of several key reasons. The study displayed that some reasons are more important from others to small companies, and the lack of these reasons is the cause of unwillingness to enter the business. The strongest reason is to distribute product and company information. It is then followed by the motivation to enhance company image, improve communication with customer, and provide customer support. Generating sales is surprisingly on the fifth place. The study indicated that for small business, marketing purposes is more important than profitability. III.3 E-Business, Culture and Globalization E-Business has undeniable role in the process of globalization. Globalization itself has accepted the concept of E-Business due to several reasons. First, it is the ability of the technology to produce efficiency, cost effectiveness, increased profitability and even increased productivity. Second, it is the ability of the technology to provide standardized form of communication irrespective of language. Third, E-Business technologies enable some mechanical processes to be taken over entirely by machine. Fourth, the ability of E-Business and standardized It platforms to enable the immediacy of current transaction. Beside globalization, E-Business also faces cultural issues as a challenge. Different styles of personal interactions have threatened professional relationship by means of E-Business. However, the writer of the article has stated that E-Businesses are generally built under the same fundamental basis, which is to increase effectiveness and efficiency of operations. Thus, cultural barriers can be overcome using those similar basic understanding (Corbitt, 2003). III.4 Electronic Retailing The roles of the Internet and E-Business can also be viewed from existing case studies. From a case study by Heim and Sinha, I discover that food retailers are also affected by E-Business. The study indicated that there is a positive correlation between providing electronic service process and customer satisfaction & loyalty (Heim & Sinha, 2001). Another study of the food supply and demand chain in the United States has also stated that the food industry performs the E-Commerce trough business to consumer and business to business relationship to reduce cost and increase efficiencies in the procurement, storage and delivery of food to retail stores or distribution center. E –Commerce also provides information about customer’s purchases and preferences. The system can also track the flow of product from production to customers. The circle of information is proven to result high quality and consistent products to be consumed at lower prices (Kinsey and Buhr, 2003) III.5 Governmental E-Commerce In my study of how E-Business and E-Commerce influence the Government sector, I found a case example of how E-Business and E-Commerce affect the economy of China. Professor Yang Bo-Ling from China stated that the application and development of network technology in China has received nationwide attention and thus provide a good foundation for the full realization of informatization and the popularization of E-Commerce itself. He mentioned that the role of network technology in economy had shifted from the governmental concept of the new economy to the pragmatic approach of profit based enterprise informatization (Bo-Ling, 2001). III.6 Global Partnership for E-Commerce Ira Magaziner, the former senior advisor of the President in policy development stated that global discussions have been conducted in order to create a framework that will allow electronic commerce to grow. Magaziner stated that The US Government is trying to work as equal partners with other governments to design the architecture for a future digital economy (‘Global Partnership’, 1997). I have also learned that National Priorities are being protected by a government program called the Information Technology Research Programs. Some of the national priorities are: integration of computing, networking, human interfaces and innovative management; innovative approaches in order to integrate data, models, and communication analysis and control systems; etc (‘Information Technology Research’, 2003). IV. Discoveries Within this elaboration, I have described E-Business, E Commerce and their importance and roles toward the local and global business. The increasing importance of information and knowledge, the amazing global development of E-Business and E-Commerce, the massive attention provided by international organization and the existence of success examples have all defined the importance of E-Business and E-Commerce in global and local business. E-Business and E-Commerce has been stated as the future of IT Trend that will evolve constantly fueled by private and governmental interest. The roles of E-Business and E-Commerce in local and global environment and how they face existing challenges in different environments have been described. The concept also have a considerable role toward governmental management. As the roles are becoming widely acknowledged, nations have put efforts in creating global partnership to produce international frameworks relating to the issue of E-Business and E-Commerce, to benefit the development of the concept throughout the world. 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