Information Technology of Investor Relations Function - Term Paper Example

Information Technology of Investor Relations (IR) Function Thesis Statement Technological advancements have evolved the functions of the investor relations department. The two-way communication between a company, investors, and the financial community has become seamless to cater for the dynamic needs of all the parties involved. Technology is continuously shaping the direction of the investor relation functions in remarkable ways. Discussion In the previous decades, the investor relations functions were basic and involved communicating with the prospective investors about prevailing investment options within the company. Such communication required both parties to meet physically. It is evident that the investor relations functions were limited to mere speculation. Technological advancements have influenced the two-way communication among companies, investors, and the financial community over the past five years. The main point of concern is that, technology is dynamic, and the IR function will not be the same in 2015; as it has been over the past five years. Changes in the Investor Relations Function Technology has pioneered significant changes in the IR function to modify the way information is shared to the public community. The functions of the IR professionals appear to have become more comprehensive to accommodate the needs for potential investors and the financial community. The changes are attributable to the prevailing demand of information about investment options in the public domain. Some of the evident changes are; Media and Public Relations The investor relations functions ensure that there is sufficient amount of information about a corporation available to the prospective investors. The IR functions have expounded to cater for the demand for information in the public community. The media have been used as a platform for sharing information to a wide population. In the past decades, investors and the financial community had to play an active role in the search for information about investment options. The establishment of media houses using sophisticated equipments has enabled the way information is accessed by the public community. Advertisements and communication through the social media have improved the public relations values of corporations, encouraging investments. Reputation Management The financial community and investors are concerned with the reputation of corporations before making any investment options. IR professionals have to undertake the reputation management role to ensure that more investors are convinced to invest into the company. Advancements in technology have shifted public relations approach to simply ‘a search’ over the internet and distinctive media platforms. Prospective investors can simply search the company’s profile over the internet to derive significant amounts of information. Technology has enabled the investor relations function to be automated and easily accessible to prospective investors and the financial community. Corporate Governance Corporate governance defines the way corporations are directed and controlled. Investor relations have been modified to accommodate the corporate governance functions. Advancements in technology have modified the internal controls that aim to direct a corporation towards achieving the investment objectives. Investor relations professionals have adopted technical skills to change the approach used by individuals to source for investment options. It is through internal controls that investor relations can be established with a company. Corporate Social Responsibility Corporations are required to have a positive impact on the social welfare. Advancements in technology have expounded the functions of investor relations to incorporate corporate social responsibility. It is the responsibility of every corporation to ensure that the public community has access to all the relevant information regarding the company. The investor relations professionals utilize the social media platform to conduct the company’s corporate social responsibility requirements. Crisis management and Sustainability In the past decades, crisis management required a hands-on-approach to ensure that a corporation going concern objectives were sustained. Technology has shifted the crisis management and sustainability roles to the investor relations departments. Technology is pervasive, and the investor relations professionals have implemented internal controls to ensure that investors have no doubt about the sustainability of the corporation. Internal controls identify any crises in the systems and appropriate action is undertaken to solve the crisis to enhance sustainability. The Direction for IR Technology is dynamic. In addition, the IR functions will continue to change because changes in technology are inevitable. The IR professionals use devices that are installed with both simple and complex business apps that aim to keep them at par with the changes in the business market. As the world economy shifts to a 24-hour economy, the accessibility of information will change in proportion to the advancements in technology. IR professionals will need to ensure that the company is accessible through email, Facebook, and Twitter. Individuals who access such services must be supplied with sufficient information so that the company may remain relevant. As technology advances, the IR function will need to change accordingly to reach a wide population. IR professional’s day will be tied-up to watching a comprehensive coverage of national and international news to obtain a sufficient dose of information. In the past decades, viewers watched news to know about new events that are being reported. Business news was considered boring and monotonous. In addition, the investment information that was available was too complex to convince the public community to invest in a particular company. As 2015 approaches, the financial community and investors are getting more involved in the investment information that is available. The IR professionals have been put to task to ensure that the internet is ‘awash’ with the company’s information to encourage investments. Technology will expound further the function of IR Corporations can utilize the opportunities offered by technology to transform the IR functions. Technology offers the opportunity for corporations to gain a competitive advantage by efficiently utilizing the limited resources available. The IR functions will only be transformed if the corporations adopt a high level of technical know-how to utilize such opportunities. The IR function will adopt comprehensive roles that are significant in running the company. It should be noted that investors are not only concerned with the quantitative aspects of the corporation. The qualitative aspects are significant when investors and the financial community analyze the viability of the corporation as an investment option. The IR department will be responsible for formulating a business model through a detailed evaluation of the market gap. Adopting the relevant technology to gain a competitive advantage would ensure that the IR department formulates a business plan that would not only transform the department but the corporation as a whole. The management structure should be endowed with technocrats who can identify and utilize opportunities presented by technological advancements. Such a management structure would transform the IR function by ensuring that there is sufficient information to improve the two-way communication between the corporation, investors, and the financial community. Key Technologies to Facilitate IR Function Transformation A variety of technologies will be used to attend to the specific needs of the IR department. Formulating simulation models would be significant in ensuring that the IR function of communicating with the investors is efficiently conducted. Simulation models would mimic the IR functions to indicate how the department should be run. In addition, they provide an insight of any problems that might occur within the department, and provides available solutions to such problems. Simulation models can transform the IR function to achieve a seamless flow of information between the corporation, investors, and the financial community. The corporation may also acquire specific software (Splunk) that can read and interpret large volumes of data. In addition, the software should calculate and illustrate investment trends to provide a visual image of the investment options available in the corporation. The IR functions will be efficient because they would provide comprehensive information to investors. The information would be free from ambiguity, and the IR function will have an edge in attaining competitive advantage. The IR function transformation would be efficient if the department had 24-hour internet access. Attaining sufficient information goes beyond the IR professionals watching national and international news. They should have unlimited access to the internet to ensure that they are always online. The advantages of the IR professionals being online are two-fold; They will have access to a pool of investment information, and They will be able to attend to the needs of the investors regardless of the time. Installing a stable internet connection would ensure that the IR functions transform to efficient ways of sharing information with the investors. Conclusion The IR function is the backbone for all business operations within a corporation. Technological advancements provide opportunities to corporations to automate the IR functions. Currently, the IR function in most corporations is endowed with the technical resources to meet the needs of investors and the financial community. The inherent question is whether the IR functions can transform according to the changes in technology. IR functions would need to evolve in 2015 and onwards to ensure that they efficiently utilize technology, which is a limited resource. Read More