Impact of IT on Organizations - Coursework Example

Impact of IT on Organizations In the contemporary business world, corporations deploy traditional and newer tools of information technology in order to have an organized and improved business setup. As one looks around, one finds almost all the existing organizations to be pooling in a great amount of money on building up a structure that represents the Information Technology (Mahmood & Mann, pp. 97). As earlier discussed in the proposal, Informational technology, defined as a collection of computing machines along with other related digital communication tools has extravagant powers to lower the overall costs involved in the complications of communications and the processing of information (Brynjolfsson & Hitt, pp. 24). In this regard, this paper will put efforts to analyze and discuss the role of integration of information technology in different process of business organizations, and will evaluate its impact on performance of the organizations. In this respect, with the emergence and recognition of the power of internet, organizations started proliferating in terms of widening their horizon through networking and meeting the potential customers with merely a click (Melville, Kraemer & Gurbaxani, pp. 1-2). Viewing the literature on the subject matter, a clear distinction between IT Architecture and IT Infrastructure came into view. Researchers suggest that the former is the overall plan devised for a to-be-built model (Ross, pp. 1). This is to say that the impact of the IT Infrastructure is the most when the IT Architecture is in accordance with the internal strategic circumstances of the organization. In this view, as the IT capabilities turn stronger and more mature, it starts influencing the strategies with which the organizations get along (Ross, pp. 3). Thus, it gradually, turns out to be an additive value where organizations start molding their planning and performances concerning the extent of capability that they have in the form of IT infrastructure (Do, Elbaum & Rothermel, pp. 2). In addition, analysis has indicated that efficiency and effectiveness are the two main domains that come directly under the shade of impact of IT in organizations. In specific, as discussed in the proposal, efficiency indicates the achievement of maximum output, and on the other hand, effectiveness is the level of quality that an organization achieves in the process. Experts have emphasized upon the same and discussed that the IT efficiency is one of the primary aspects that leads to the strategic decisions that an organization takes in favor of integration of technology (Ross, pp. 14). On the contrary, some researchers suggest that the impact of information technology takes place in the strategic, informational, and transactional categories (Mahmood & Mann, pp. 100). They say that all these three categories are inter-related. On one hand, where transactional IT purely depends on a marvelous organizational internal performance, this organizational performance could be molded in applying IT to its maximum (Rivard, Aubert & Patry, pp. 56-60). Reviewing the literature, one might take into account the example of Eastman Kodak Company and IBM, which converged under the agreement that IBM took under control the four data centers of Kodak Company, their works, and employees (Henderson & Venkatraman, pp. 473). Today, one can see the productivity of both organizations in their domains and their ever-increasing reputation. Analysis of different case studies has indicated that the greatest and substantial impact of IT on any organization could be to give the organization’s capability of interacting with its customer and suppliers, a boost. A company’s success depends on its internal and external publics. Here, the internal publics are the employees and workers who work within the organization; on the other hand, external publics are those to whom the company’s production affects. The latter are consumers and the suppliers. For the former public, the IT within the organization proves to be beneficial concerning the rate of flow of information to which they are the ultimate destination. However, for the latter, it is possible to be in a continuous correspondence with the organization following the use of IT. Furthermore, adding to this impact, experts have asserted that on-line systems of information give a proper control to the people at the management level, as they are able to attain a 24-hour access to all the functions and nitty-gritty that take place within the organizations. They might have a constant report about the positive outcomes or the flaws in the chain to make it better (Mahmood & Mann, pp. 100). Talking about the financial organizations worldwide, it is very much evident that the largest investment of IT is taking place among the financial organizations. It is an observation that the utilization of computer technology in the banking sector occurred in the early 1950s for the very first time (Shaukat & Zafarullah, pp. 38) with the installation of the largest commercial computer in the Bank of America. In addition, the Automated Teller Machine, shortened as ATM these days, was introduced in the early 1970s. The deployment of this technology eased the consumers’, as well as the producers’ burdens. As far as the banking organization itself, is concerned, the ATM technology provided them opportunity to emerge in multiple tasking at the same time in a way that the machine did one of their important chores. In the same way, the consumers found an easy access to their money which were deposited in bank but, the transaction could place anywhere with the accessibility of these user-friendly machines. This, consequently, encouraged potential consumers to get an affiliation with these banks to benefit with the services offered (Shaukat & Zafarullah, pp. 39). Business professionals have summarized their works by saying that the information technology has brought the present business scenario to a completely new level. Considering the positive consequences, they say that customer satisfaction is what organizations seek and strive to seek. They attribute it to the application of IT in the business arena. They also attribute company’s image and an ever-increasing repute accompanied by a sustainable interest of the employees within the workings of the organization to the same (Shaukat & Zafarullah, pp. 45). When an organization begins employing information technology infrastructure, the main idea that revolves around is providing the inner employees with such an extreme comfort, which could result in an environment of maximum productivity for the organization itself in assuring sophistication and an organized setup (Mahmood & Soon, pp. 870). In return, the trust of the prospective consumers is gained and the consumers and the competitors alike view your organization as a producer of a substantial material in the market (Markus & Robey, pp. 583-584). Talking further in the above-mentioned domain, Brynjolfsson and Hitt suggest that the computer-based supply chain integration plays an essential part in the industries that are related to packaged products. In a commonly known scenario, the manufacturers had to have a good networking with the retailers and the suppliers to convey their products to the market. They also depended upon the retailers to stock their products in the market in order for the customers to have easy access. For this purpose, the retailers demanded for more compensation to meet the manufacturer’s requests. Additionally, one of the negative consequences of this practice owing to the fact that the retailers stocked the products; the manufacturers had to increase their productivity without knowing the exact sale of their products. However, the electronically controlled supply chain reduced the expenses of the manufacturing organization in a way that they are not liable to any additional compensation any more. This occurred as the manufacturers could be in a direct deal with the end-consumers through their websites or email correspondence. Customers feel comfortable in ordering for a purchase, which the manufacturers deliver to them without any delay (Brynjolfsson & Hitt, pp. 29). Moreover, the electronic transfer of payment speeds up the process of buying and purchasing with an assurance and satisfaction at both the sides. Some experts argue that the application of information technology is directly proportional to the financial and economic gains that come to the organization (Aro, pp. 9). According to them, these benefits are increasing to a greater value now than they were earlier. He says that an organized planning that is machine oriented gives way to an organized functional environment with increased productivity and performance. These systems support the business in the ways as mentioned above termed as integration, which is organization-wide, an information transparency and automation of the process (Aro, pp. 10). There are two main divisions of the benefits of applying technological systems according to such experts. One is technical benefits while, the other is business benefits (Aro, pp. 12). He cites that technical benefits concern the software maintenance within the organization. The latter is about enhancing the business in any way the organization can. Reduced administrative and processing costs and reduced errors and delays make the main components of business enhancement. This context is famous among other researchers as well (Hong & Kim pp. 266-267). In this regard, the paper includes comprehensive efforts of the researcher for the analysis and scrutiny of different studies regarding the impact of information technology on the performance and productivity of organizations globally. Lastly, the paper included arguments, as well as counter arguments of different experts regarding the IT’s impact, and additionally, the researcher analyzed different case studies as well, which indicates that majority of experts agree that IT results in a positive impact on the business organizations, and thus, it is vital for their success. Works Cited Aro, Max. Information Technology Impacts on Organizations: ERP Project Case Studies. Swedish School of Economics and Business Administration, 2005. Brynjolfsson, Erik & Hitt, Lorin. Beyond Computation: Information Technology, Organizational Transformation and Business Performance. Journal of Economic Perspectives, Vol. 14, No. 4, Pages 23-48, 2000. Do, Hyunsook, Elbaum, Sebastian & Rothermel, Gregg. Supporting Controlled Experimentation with Testing Techniques: An Infrastructure and its Potential Impact. Department of Computer Science and Engineering, University of Nebraska - Lincoln, 2005. Henderson, John & Venkatraman, N. Strategic Alignment: Leveraging Information Technology for Transforming Organizations. IBM Systems Journal, Vol. 38, No. 2 & 3, 1999. Hong, Kyung-Kwon & Kim, Young-Gul. The Critical Success Factors for ERP Implementation: An Organizational Fit Perspective. Information and Management 40, 2002. Mahmood, Mo & Mann, Gary. Measuring the Organizational Impact of Information Technology Investment: An Exploratory Study. Journal of Management Information Systems, Vol. 10, No. 1, 1993. Mahmood, Mo & Soon, Siew. A Comprehensive Model for Measuring the Potential Impact of Information Technology on Organizational Strategic Variables. Decision Sciences, Vol. 22, No. 4, 1991. Markus, Lynne & Robey, Daniel. Information Technology and Organizational Change: Causal Structure in Theory and Research. Management Science, Vol. 34, No. 5, 1988. Melville, Nigel., Kraemer, Kenneth & Gurbaxani, Vijay. Information Technology and Organizational Performance: An Integrative Model of IT Business Value. Center for Research on Information Technology and Organizations, University of California – Irvine, 2004. Rivard, Suzanne, Aubert, Benoit & Patry, Michel. Information Technology and Organizational Transformation. Elsevier Butterworth-Heinemann, 2004. Ross, Jeanne. Creating a Strategic Architecture Competency: Learning in Stages. Center for Information Systems Research, 2003. Shaukat, Muhammad & Zafarullah, Muhammad. Impact of Information Technology on Organizational Performance: An Analysis of Qualitative Performance Indicators of Pakistan’s Banking and Manufacturing Companies. European Journal of Economics, Finance and Administrative Sciences, 2009. Read More