IT Influence on Business, Core Business Benefits From IT

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Table of Contents

Meeting Competition pressures
Flexible platform to support the business
Core Business Benefits from IT

Information Technology has made a lot of difference in the business world. It is almost impossible now to imagine a business without information technology. Business and IT has been intermixed with each other now to such an extent that business success now implies proficiency in the execution of business transactions through information technology. IT is no longer a tool for top highly professionalized businesses. It has become a necessity for each and every business, whatever may be the size or structure of the business, as IT now controls and executes every business action in each business segment and section.

Old guards of business no longer treat IT as an impediment but consider that a necessary ingredient for the success of a business venture. IT no longer acts as a constraint on the business, as was the earlier impression to non-IT- the era of the business community. In fact, monitoring and reporting capabilities of information technology create a more flexible infrastructure that provides a platform where governance of organizational and legal compliances gets polished with excellence.

Meeting Competition pressures

Changes in business processing bring competition and pressure to cope with. Such competition is rising at an alarming rate. Today business environment is infested with mergers and acquisition activities that involve bringing together different cultures and systems into the merged entity. Sometimes this leaves fewer resources and handicaps businesses with shortening energy to deal with external competition forces. Moreover legal and other governance and audit requirements are increasing so rapidly that businesses find it hard to improve upon qualitative processing to face competition.

Under all such compelling circumstances, information technologies bring in technology to exploit existing resources to structure, manage and operate organizations effectively to challenge the external forces. Entities no longer now develop business strategies separate from IT strategy, because IT is an enabler of business initiatives. There is, therefore, a need to integrate sound business and IT planning, and to incorporate effective financial and management controls within new systems, so that entities develop competitive abilities.

Flexible platform to support the business

IT endeavors to create flexibility in business processing. It has moved from an application-focused approach to a business processing-focused vision. Newer IT developments such as ‘Service Oriented Architectures’ and ‘utility computing’ provide basic platforms for business processing. In fact dependency on IT has become so critical that not the availability of IT may prove fatal for businesses. ‘The criticality of the technological infrastructure to the organization has rapidly changed to become a major commercial concern. When organizations first started utilizing technology, downtime was not a serious an issue as it is today.

Computers were used for esoteric purposes and few employees would have access to the systems. As more employees have become dependent on technology, downtime has become a major issue, with certain businesses (for example medical and air traffic control) having a life or death requirement for continuous uptime, and others (e.g., financial and retail) facing massive financial losses for each minute that a system is unavailable.’ (Clive Longbottam and Sarah Pocock, June 2008)¹

Core Business Benefits from IT

It is now an established fact that IT-based business involves fewer hassles. Various technological solutions enable storage and retrieve documents electronically so fast that business deals are sealed without the requirements of the physical presence of decision-makers.

In particular, business accounting has benefited a lot from IT. Internet-based accounting allows firm accountants to perform a variety of tasks from any computer terminal with an internet connection. Financial records can be updated within no time as accountants finalize reports, and enter data online. Entities can deliver electronically the financial statements and other reports instantly. They can easily obtain information from their clients through file transfers electronically. Internet-based technologies eliminate geographic barriers. Entrepreneurs get access to current statements relevant to their clients’ financial positions. They can create access policies to protect sensitive data. For example, they can give some parties ‘read only’ access and allow others to make entries.

The IT frees entities from having to engage employees locally. Administrative works in entities have become paperless, saving millions of dollars annually. Internet-based technologies allow firm employees and freelancers to work from home.

Online meetings and conferences allow entities to communicate with their clients and staff members from any location at any time. There is unimaginable growth of IT in the use of business activities. Entities are using and keep on updating computer hardware, databases, internet, intranet, soft wares, and many other IT paraphernalia for maintaining business transactions, accounting, and financial transactions, and other records. Development is a continuous process, and information technology is not only itself a very recent phenomenon but it is developing so fast that nothing seems impossible for its use in the business and financial field in the very near future.

Clive Longbottom and Sarah Pocock, BSM, IT, and Business Facilitation, Quocirca Insight Report, 2008.

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IT Influence on Business, Core Business Benefits From IT

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