Starting in the early 1980s with the first desktop computers,
informationtechnology has played an important part in the U.S. and global economies.
Companies rely on IT for fast communications, data processing and market
intelligence. IT plays an integral role in every industry, helping companies
improve
business processes, achieve cost efficiencies, drive revenue growth and
maintain a competitive advantage in the marketplace.
Information technology can speed up the time it takes new products to reach
the market. Companies can write product requirement documents by gathering
market intelligence from proprietary databases, customers and sales
representatives. Computer-assisted design and manufacturing software speed up
decision making, while collaborative
technologies allow global teams to work on
different components of a product simultaneously. From innovations in
microprocessors to efficient drug delivery systems, information technology
helps businesses respond quickly to changing customer requirements.
Stakeholder integration is another important objective of information
technology. Using global 24/7 inter-connectivity, a customer service call
originating in Des Moines, Iowa, ends up in a call center in Manila,
Philippines, where a service agent could look up the relevant information on
severs based in corporate headquarters in Dallas, Texas, or in Frankfurt,
Germany. Public companies use their investor relations websites to communicate
with shareholders, research analysts and other market participants.
Process Improvement
Process improvement is another key IT business objective.
Enterpriseresource planning (ERP) systems allow managers to review sales, costs and other
operating metrics on one integrated software platform, usually in real time. An
ERP system may replace dozens of legacy systems for finance, human resources
and other functional areas, thus making internal processes more efficient and
cost-effective.
Cost Efficiencies
Although the initial IT implementation costs can be substantial, the
resulting long-term cost savings are usually worth the investment. IT allows
companies to reduce transaction and implementation costs. For example, the cost
of a desktop computer today is a fraction of what it was in the early 1980s,
and yet the computers are considerably more powerful. IT-based productivity
solutions, from word processing to email, have allowed companies to save on the
costs of duplication and postage, while maintaining and improving product
quality and customer service.
Competitive Advantage
Cost savings, rapid product development and process improvements help
companies gain and maintain a competitive advantage in the marketplace. If a
smartphone competitor announces a new device with innovative touch-screen
features, the competitors must quickly follow suit with similar products or
risk losing market share. Companies can use rapid prototyping, software
simulations and other IT-based systems to bring a product to market cost
effectively and quickly.
Globalization
Companies that survive in a competitive environment usually have the
operational and financial flexibility to grow locally and then internationally.
IT is at the core of operating models essential for globalization, such as
telecommuting and outsourcing. A company can outsource most of its non-core
functions, such as human resources and finances, to offshore companies and use
network technologies to stay in contact with its overseas employees, customers
and suppliers.
