Impact of the Information Revolution on the Way Enterprises Operate - Essay Example

Impact of the information revolution on the way enterprises operate The information revolution has altered enterprise operations through increased agility. The rate at which businesses can respond to external circumstances has been modified dramatically due to increased connectivity. Companies are now able to access information from suppliers, consumers and any other stakeholders directly through the internet. Issues such as late order entries and shipping difficulties are slowly disappearing. In fact, now consumers expect rapid responses from their chosen suppliers. Glitches are no longer as tolerated as they were in the 1980s and before (Cerny, 2007). Furthermore, employees who used to take orders now dwell on improving customer service by collecting useful information such as customer location, sales numbers and product details. Not only has this agility minimised the cost of acquiring such valuable information, but it has also increased the quality of services offered. Firms no longer need to spend plenty of money acquiring these resources from third parties. Furthermore, the ease with which computers get this information frees up employee time for more value-adding activities. Immediate communication of schedules, orders, inventory and production are now easy to do thanks to the information revolution (Bond, 1997). This has minimised wastage, saved company valuable resources and led to increased production. Studies indicate that not all organisations have been able to benefit from computer usage. Only those that respond quickly to information are the ones who are rewarded. Therefore, huge returns are contingent on certain prerequisites. Organisation of work is altering dramatically due to the information revolution. It is now possible for any human resource representative to access management developments from the comfort of their offices. Therefore, many institutions are reconfiguring their management system. They want to ensure that they are utilising the best systems in the market. Use of team-based rewards, flexible work schedule and continuous employee growth are just some of the measures being adopted by different firms, who learn from others through internet connectivity (Blattberg et. al., 1994). Technology has significantly reduced entrance barriers for new businesses. As a result, larger institutions are facing competition from all quarters. New entrants have challenged these traditional players to rethink the way they carry out business. Some of them have shed off previous business functions in order to focus on their core function. Operations are thus changing because what was previously conceived as a source of competitive advantage, such as having a large network of plants, is now considered a liability (Fleming, 2002). Businesses are redefining competitiveness in terms of quality and ease of production. Deconstruction of operation processes is also a reality today. The information revolution has enabled multiple businesses to enter different fields and each of them has a source of competitive advantage. Therefore, larger businesses have been fragmented. It is no longer enough to subsidise one’s unsatisfactory performance with activities from other areas (Gabel and Mansfield, 2008). If a company uses this traditional strategy, competitors will enter and offer specialised services to those concerned. The end result is disintegration of retailers, distributors and wholesales. Businesses are no longer the same entities that they were perceived to be. Now, they are getting smaller and more disjointed. Outsourcing is the order of the day since coordination of activities is no longer necessary. Invoicing is now an automated activity. Order entries occur electronically and the need to coordinate activities is slowly declining. Companies now find that it is cheaper to purchase some of the commodities that they previously produced. Shrinkage is now rife in almost all sectors of the economy. Studies have also found that organisations with the greatest investment in information technology also happen to be the most shrunken ones (Bond, 1997). Therefore, payrolls are getting smaller not just because of automating activities, but because of focus on core activities as well as reduced costs for others that add value to similar activities. Efficiency is yet another advantage that several businesses are enjoying due to the information revolution. In the past, enterprises required large warehouses to store excess stock, since they lacked effective ways of demand forecasting or controlling their business processes. However, with increased interconnectivity between parties, excessive stock-keeping is no longer necessary (Bower and Christensen, 1995). Several companies have eliminated large warehouses and inventories that were stored until they were needed. Even customer service centres designed to cater to consumer needs have been synchronised. Information exchange has reduced the need for so many branches and integrated them into much smaller entities. Efficiency can also be seen in the way firms have reduced the need for catalogues. Now they can access customers directly through the computer. Many of them save on rent costs in internet space than doing the same at a mall (Ghareeb, 2000). The information revolution has grown e-commerce by leaps and bounds. The information revolution has also created new opportunities for entrepreneurs in information itself. Trading in knowledge is becoming a start-up option for businessmen around the world. Not only is it cheaper to enter such an industry, but one needs relatively minimal capital and resources for the same. Even traditional business functions like marketing and distribution are not relevant in such a sector. A series of other spin-off careers are also emerging from trade in information (Dertouzos et. al., 1998). Litigation lawyers in this industry are just one category of the new brand of information-centred professionals that are growing. Globalisation of business operations is now a reality. Prior to the revolution, most firms needed direct contact with other entities in order to do business with them. Basically, they had to have a local presence in key markets. This meant that organisations had to think twice about spreading their operations geographically across the globe. However, greater interconnectivity between partners meant that businesses could access soft information without having a physical presence in those areas (Keohane and Nye, 1998). Slowly, firms began overcoming geographical barriers that were difficult to do without computer connectivity. This has increased the amount of businesses being done between different parts of the world. E-commerce across the globe is growing or becoming easier because technology has facilitated the means to transfer information across these distances. Video teleconferencing is now possible between a managerial unit in Japan and another in the United Kingdom (Surgeon, 2000). Data, graphs, documents and other messages can be easily exchanged among such individuals. Alternatively, on a micro-level, entrepreneurs selling intangible goods can make their commodities available to anyone in the world. Through this approach, it is possible for people to buy software, journal articles or music through tools of technology from any part of the world. Therefore, businesses now need to make themselves available twenty four hours a day if they sell online services to individuals in the world. The retail industry has also dramatically changed due to the information revolution. It is now possible for manufacturers to deal directly with their consumers through online shopping. This allows them to give a more personalised service to consumers (Cleveland, 1997). Manufacturers can thus enjoy greater control of their brand through elimination of intermediaries in this platform. Alternatively, consumers can also benefit from this direct experience by tracking order progress through different mechanisms. In the service sector, a number of service offerings have also changed dramatically. For instance, it is feasible to access insurance advice, legal advice or medical advice from the comfort of one’s home. (Alejandro et. al., 1998). Not only are these services relatively cheap, some of them are accessible for free. Consumers are on the beneficial end of this approach. Service businesses now need to alter the way the offer their products (Shwartz, 2003). They have found ways of contacting consumers through these avenues. Firms in the news industry warrant special attention. Their operations have altered how they present the news. Most reputable newspapers and magazines have online versions and blogs. They have now come to rely on advertising revenue as their primary source of income online. Information technology is no longer just one function of these business operations. It is now regarded as the major platform for sale (Rai, 2001). Therefore, journalists are no longer relying on their traditional news outlets to build their brands. The rate of productivity has also increased for employees that are in shrunken businesses. Individuals are able to telecommute owing to the information revolution. They can work for longer hours or make use of their time doing work-related activities that would otherwise have been wasted in doing unproductive activities like transport (Reschenthaler and Thompson, 1996). Disconcerting outcomes of the information revolution It should be noted that disaggregation of business processes may not always be a desirable thing. Intermediaries play an important role in business supply chains. They ought not to be construed as parasites because they connect different parties in business and cause seamless transitions. Therefore consumers have a lot to gain from their presence. The elimination of some of these intermediaries sometimes confers benefits on businesses alone but does not allow trickle downs to consumers (Drucker, 1999). Intellectual property abuse and failure to award benefits to information creators is also another challenge. Businesses in the book, movie and music industries are dramatically affected by this fact. Due to wide access to several forms of intellectual property, businesses are losing control over the distribution of their material (Petersen and Rajan, 2000). Any person in the world can pirate information and sell it as their own. Unless legal mechanisms exist to curtail these practices, then several innovators are deprived of their hard-earned profits. Books are sometimes available electronically without an individual’s permission or their information can be rewritten and altered in a manner that disguises direct alterations. Since several websites are guilty of this vice, it is becoming increasingly difficult for entrepreneurs to litigate and access what they rightfully deserve. People on efficiency’s receiving end may also be disconcerted by the information revolution. As it has been reported earlier, more and more companies are shrinking. The need to employ hundreds of clerks to check on orders manually has been eliminated (Gabel and Mansfield, 2008). Production facility coordinators who compared their production capacities with what may be required in the near future are no longer needed. Computer-linked machines already do this work for them. Therefore, shrinkage in business means loss of employment for some people. Some opponents to this argument believe that the information revolution may have eliminated certain jobs but it has also created new opportunities. It is incumbent upon recipients of these losses to look for new ways of making themselves relevant in business. Globalisation from increased information exchange has also had its downsides. In as much as information is needed in order to facilitate business, it is not the end of the story. Companies cannot enter blindly into another country without looking at the ease of doing businesses there. Information exchange does not make up for the lack of infrastructure or the financial systems needed to do business virtually (Perez, 2002). Furthermore, corruption may be rife in some developing countries and this may slow down business. Organisations still must contend with difficulties in delivering orders to persons in third-world countries. Government regulations, lack of government regulations among other problems still have to be overcome in order to facilitate business (Rodriguez and Wilson, 2000). Employment challenges have also been touted as potential drawbacks of the information revolution. The use of greater information synchronisation is likely to minimise the need for employees in the industrial sector. This part of the economy often accounts for most blue-collar work. It may thus be stated that the revolution will favour individuals with a decent education and sideline those without (Goodwin, 2003). More service-sector jobs will be available, yet these depend on an individual’s educational capabilities. Conclusion The information revolution has radically altered transformed enterprise operations. Individuals can access consumer, supplier and logistic information at the click of a button. This has enhanced efficiency, eliminated the need for too many employees and also revised the supply chain. Companies now focus on value-adding activities while outsourcing other parts of the value chain. Some have even squeezed out intermediaries through online purchases. More organisations are embracing globalisation and are offering intangible goods to buyers in different parts of the world. Others are also streamlining operations across the globe through faster communications. Regardless of these benefits, the information revolution has created intellectual property abuses, minimised employment for blue-collar workers in industries, and obscured the challenges of globalisation. References Alejandro, R., Jadad, M., Phil, D. and Gagliardi, A., 1998. Rating health information on the internet: Navigating to knowledge or to Babel. JAMA, 279(8), pp. 611-614. Blattberg, R., Glazer, R. and Little, J., 1994. The marketing information revolution. Boston: Harvard Business School Press. Bond, J., 1997. The drivers of the information revolution: Cost, computing power and convergent. 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