Strategic Use of IT in Business

Introduction

Current essay is divided into two main subsections which though are firmly interconnected. First, the issue of increasing importance of informational technologies in business and organization are discussed with considerable reference to existing technologies. Thereby current essay provides necessary background of the problem and introduction which is then followed by critiques of relevant academic journal research (article) on abovementioned topic. By means of criticizing an approach, factual material or formal research criteria presented in a given article current essay further integrate our findings with elaborated background to produce relevant conclusive remarks.

There is no denying the importance of the fact that nowadays many different entrepreneurs begin new business units with qualitatively different expectations than it was in the past. The creation of new business ventures and enterprises influences the format of relations with customers. Besides this new technologies are considerably changing the contours of business environment.

No single person can doubt the dramatic effect that the new ICT have had in the business environment. The mobile phone, computers and internet, CAD enterprise architecture, organizational computer networks and automatic control and testing systems have probably changed the way work is being done in the modern global business environment.

The utilization of ICT in business activities it tied with increasing productivity and improving customers’ satisfaction which is no less important. However, as these firms integrate the ICT in their businesses they need to be aware of the emerging technologies and at the same time should be prepared to harness their power effectively (Fisher and Keny, 2000, p. 219). The software utilization should correspond with desires and needs of customers and entire community.

Moreover, it is important to point to the crucial role of informational technologies in organizations’ strategic development which is though contested by some researchers is very important for understanding abovementioned issues. (Brown and Gatian, 1995, p.238). When we talk about IT strategy, it is based on four strategic aims which basically define a framework in which decisions around ICT are organized. The four strategic aims are as follows:

1. Increasing the scale of service delivery
2. Ask for information once.
3. Integrate their system.
4. Make the most of their resources.

Benefits of the system change

The importance of informational and communicational technologies is immense in terms of the way the customers are cared (Michael and Anders, 2000, p17). The primary precondition for the high level of company performance and sales is an attraction of customers. The customer’s relationship management software (CRM) will therefore improve customer interaction consistence between the company and its customers. The new CRM software increases the accuracy and accessibility of information obtained from customers. The main objective however, for introduction of the new technology is to increase the customer interaction consistency among all representatives by increasing company control and manner of customer interaction.

There is no denying the importance of the fact that proper integration of Business Intelligence Software into organizational system should be considered as the primary tool for increasing cost-effectiveness and efficiency. This system is to help them predict the future company records by analyzing and reporting on data from disparate system. This implies that without business intelligence it is impossible to justify how much company has invested. To improve information flow among different members of the company, the Business Intelligence are to be used to disperse critical information to various key constituents and decision makers within the company as well as the external dealers, suppliers and large customers (Robert, 2001, p. 58).

The field of marketing, order in management, inventory management, supply chain management and sales represent another realm where the business intelligent systems are utilized in contemporary business environment. Modern business institutions often rely on business intelligence which is used to track the scope of sales while supply chain and order management departments were to use it in order to relate and compare actual and projected sales data with available inventories which in its turn is done to ensure the product availability at stock.

Challenges with implementation stage

Notwithstanding the fact that the utilization of new technologies have been regarded by many researchers and practitioners as an important element of performance enhancing strategies, their implementation requires considerable efforts and costs. Most managers of companies using the technologies do not carry out strategic planning before they start using the technology. Financial evaluation of informational technology productivity and cost of implementation should be made to ensure the effectiveness of a given project.

However much it might have a good vision and smart ICT strategic objectives, the objectives might not be achieved if financial evaluation is not done. Implementation is also another area that need to be critically looked at. The company managers need not to ignore that the employees who are to use the system are supported to be provided with relevant knowledge and skills in that area. Quite a good number of companies have failed to realize the objectives they want to achieve by introducing the new technology just because op poor implementation. Employees who are to use the new technology should be trained adequately by giving them relevant knowledge and skills on how to interact with the technology.

The last but not the list is a proper insight into the issues of communication and culture. Cultural, educational and communicational backgrounds of employees should be carefully assessed before introducing new information technology programs to a given enterprise. It is critical to ensure that all the employees are prepared to utilization of new interfaces and technical processes. Communication is also very important. Customers actually need to be told that the company has shifted from the tradition means of doing things to the modern method. They should therefore prepare well for the changes that may be created when the system is introduced without communication the system may fail in the long run (Haagi, Cumming and McCubbrey, 2004, p.26). Communication and culture should therefore not be ignored by company managers.

Critiques of Olugbode et al. ‘The role of information technology in achieving the organization’s strategic development goals: A case study’.

From the beginning of the discussed article we find out that the authors provide the analysis of IT role by using the example of concrete enterprise John Nicholls Builders Ltd. without providing genuine background and analysis of IT role in overall modern economy. It seems unacceptable in terms of comprehensive approach to a problem which we follow in current essay. The authors rightly assess the main purposes of IT introduction in the enterprise such as creating control mechanism between departments, developing framework for communication and operationalization of business process, controlling cost-effectiveness and resource distribution. It should be noted though that authors’ analysis of former organization system in the enterprise seems to be considerably limited. It may be explained both by the lack of factual material and data that they received from the management of firm investigated and insufficiency of utilized methodological machinery. All these contribute to a lack of adequate starting point for IT implementation in Builder’s Ltd.

In their analysis of financial information processing on enterprise the authors provide the comprehensive analysis of existing organizational and technical limitation existing at the enterprise. Among them one should point out to such deficiency as inability to produce regular and comprehensive thematic reports and law level of access to information of various departments. Besides this it seems very reasonable to tie enterprise’s inability to cope with increasing level of accounting reports with significant inefficiency of existing software which is not adequate to process much amount of information. However, the solution proposed by authors for these problems seem to be not adequate and comprehensive. They believe that technical improvement and introduction of new software and hardware can redress existing problems in their own right.

In fact it is not as easy as they think. Introduction of the new informational technologies requires development of comprehensive organizational approaches in management and business process. Hence, it requires cooperated efforts on the part of all stakeholders including enterprise’s personal which should be trained and developed. Unless these requirements are met the prospects of sound IT integration into existing business practices would be sufficiently undermined.

The authors seem to be particularly competent in their analysis of Builders Ltd. planning and organization of IT introduction since they provide consistent account of organization formats and departments that took part in the development of IT strategy. Notwithstanding the fact of authors’ ability to rationalize their arguments and conclude on the advantages of introduced informational technology to Builder’s Ltd. they seem to considerably overestimate such facets as cost-effectiveness and communication efficiency they claim benefited. Proceeding from the factual evidence they themselves provided the discussed company still has sufficient organization problems which prohibit informational technology from realizing its positive potential. These problems should be addressed and the more they are severe the more inefficient would be the implementation of Informational Technologies in this concrete enterprise.

Conclusion

The rapid change incorporated with the competitive nature of the global business environment has made many companies to use the information and communication technology. The ways they use the ICT probably vary from one company to another. What is important is the strategic use of the ICT. The strategic use of the ICT tends to strengthen organizations capacity by improving information flow within the firm and within the different elements forming the organization. The ICT has been seen as a source to wealth creation in modern economy. It has been used widely in achieving the organizations strategic objectives and vision and above all increasing productivity. The example of Builders’ Ltd. company shows that Informational Technologies should be introduced in the wider format of organization change which provides conditions for successful and harmonic business and technological change.

References

Brown, T. and Gatian, J. Hicks. 1995, ‘Strategic Information Systems and financial performance’, Information Systems, 11(4): 215-248.

Fisher, B. and Keny, R., 2000, ‘Introducing a Business Information system into engineering company’, Knowledge system management 2:207-221.

Haagi, S, Cumming, M and Mccubbrey, D. 2004, Management Information system for the information age, fourth ed. New York, McGraw Hill.

Michael, D. J. and Anders, G. 2000, Improving Customer Satisfaction, Loyalty and profit: An integrated measurement and management system. London, Jossey – Bass.

Olugbode, M., Richards, R., Biss, T. ,2007 ‘The role of information technology in achieving the organization’s strategic development goals: A case study’, Information Systems 32, 641–648.

Robert, J. T. 2001, Effective Business Intelligence systems, London: Quorum Books.

Sohal, A. and Lionel, N. 1998, ‘The role of information technology in Australian Business’, Journal of Information technology, 13, 2001 -217.