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Definition of Information Technology
Any kind of purchase of products or services, which are not utilized on the immediate basis but will be utilized in the near or far future to obtain profit, is known as investment. In financial world, the economic advantage that is utilized to gain profit in the business or organization is known as investment (Venkatesh, Thong and Xu 2012). It is assumed to bring financial gain in future or can be sold at higher price for more profit. The application of systems to retrieve, manipulate and storing of information and any type of data is known as information technology. This is mostly applied for any kind of organization or business. Information and Communications Technology or ICT is the extension of IT. It focuses on the amalgamation of systems with communications for the betterment of the technological world. It further combines with all types of telecommunications that allow manipulating, store and retrieving information (Schwalbe 2015). Information Technology is always contemplated as the subpart of ICT. Investment is Information Technology is an extremely important task for all organizations. It helps the organization to take perfect decisions in their business according to the modern world. It is prioritized in all organizations.
The report outlines a brief description about the utility of any kind of investments in the Information Technology world. The report covers a detailed discussion on the definition of Information Technology and the advantages of making investments in IT industry. The report also unveils the drastic changes that may occur due to this investment and how to handle the change management that will occur after introducing investment in IT (Laudon et al. 2012). The following report further outlines the disadvantages and the problems that may occur due to this investment and proper recommendations to handle such situation. The report also helps to understand why investments in Information Technology are prioritized for any organization (Mithas et al. 2012). The description of the above discussion is given in the following paragraphs.
The implementation of all types of systems that are utilized to redeem, storing and manipulation of information or any kind of data is known as information technology or IT. Information and Communications Technology or ICT is the extension of IT (Wu, Straub and Liang 2015). It focuses on the amalgamation of systems with communications for the betterment of the technological world. It further combines with all types of telecommunications that allow manipulating, store and retrieving information. Information Technology is always contemplated as the subpart of ICT. This is always used in all types of business or organization. IT can be utilized to get the facility of transferring data and information via different electronically enabled devices and Internet enabled systems (Holtshouse 2013). The equipments needed for introducing information technology in any organization are the basic computer hardware, operating systems, software, telecom equipments and Internet enabling devices.
Advantages of Investing in Information Technology
Information Technology is utilized for various developments of both the society and the rest of the technological world. This helps to evolve out positivity and more technological benefits (Ullah and Lai 2013). There are several advantages of investing and introducing Information Technology in an organization. They are as follows:
- a) Saves Time: The main advantage of IT is the saving of time. Technology has turned the clock upside down. Everything is achieved by just one click on the mouse (Stahl, Eden and Jirotka 2013). Time is saved by this and the organization is benefitted. The staffs and employees do not have to put much effort on their business.
- b) Increase in Productivity: The second advantage of Information Technology is that it increases productivity massively (Ullah and Lai 2013). Since IT saves time, there is a huge chance of increasing productivity in the business. More production is done within a short span of time, which is extremely advantageous for the organization.
- c) Improves Communication: Information Technology helps to improve the communication with all other employees and with other organizations (Rivard and Lapointe 2012). The IT engineers can communicate with other organizations easily with just one single click. This is extremely helpful for all organizations. The easiest ways of communication through information technology are the telephones, emails, audio and video conferences (Baltzan 2012). Transfer of information and data has become very easy through this technology.
- d) Improvement in Storage: Information Technology helps to improve in storing, retrieving and manipulation of information (Peeraer and Van Petegem 2012). This improves the storage and stores the data in the modern storage system. This helps in reduction of loss of data and eradication of data and information.
- e) Improvement in File Management: Previously, all the data and information were stored in traditional files (Bloom et al. 2014). However, after Information Technology came into account, the files are managed and data is stored in specific modern technological database systems.
- f) Improvement in Financial Management: Most organizations, nowadays, are using accounting software packages for their accounting tasks and accounting departments (Chesley 2014). This software package helps to do accounting related jobs in few moments without complexity. Thus, management of financial departments is easily done using this information technology.
- g) Cost effective: Another important advantage of introducing Information Technology in an organization is that it is extremely cost effective (Wu, Straub and Liang 2015). Although, the initial investment is sometimes huge because of the complex and large amount of required equipments, but the maintenance cost is extremely less and can be maintained for longer period of time (Mithas et al. 2012). This particular advantage of information technology makes it extremely popular amongst both small and large organizations.
- h) Training not required: Information Technology is extremely simple to implement and can be implemented within very short span of time. Training is not at all required for implementation of this technology in any organization (Romney and Steinbart 2012). The employees and the staffs can easily understand the basic plan very easily without any proper training.
- i) Improvement in B2C relation: Any organization or business becomes successful with the good relationship with its customers. The Information Technology in any organization helps to improve the Business to Customer or B2C relation (Peeraer and Van Petegem 2012). This happens because the customers can easily contact and be connected with the business individuals through the modern technology like the emails and phones. These responses can be positive or negative. The positive responses helps to understand that the organization is going on the right track and the consumers are happy with the service (Schwalbe 2015). However, the negative responses help to understand the shortcomings of the organization that where they need to improve their products and services (Kauffman and Riggins 2012). These responses even help the organization to improve their service and products.
- j) Improvement in Competition: Organizations utilize information technology to obtain all sorts of advantages from the competition of the business. An organization improves the technology and thus their services are improved through this (Romney and Steinbart 2012). When two recognized organizations are manufacturing same products and services, the one, who has more technical advantage will gain the priority amongst the two. Thus, competition is improved amongst them.
- k) Improvement in Marketing: Any product is easily accepted by the customers of a particular organization through the amazing packaging and marketing. If the customers will not know about the product, it is evident that they will not buy that product (Wandke, Sengpiel and Sönksen 2012). Therefore, marketing plays a significant role for any product. Information Technology helps to improve the marketing of the product through its modern technological services. People are able to know about the product and its prices easily.
In spite of having so many advantages, information technology does have many disadvantages. These disadvantages make IT less popular amongst many organizations. The disadvantages of installing information technology in any organization are as follows:
- a) Security: The main disadvantage of information technology is the security issue. Hacking is very common in case of transferring any data or information from one system to another. This can cause huge loss in the investments done on the technology (Bloom et al. 2014). Moreover, important and confidential information gets lost due to this technology.
- b) Initial Investments: As mentioned earlier, although information technology is extremely cost effective and have low maintenance costs, the initial investment is huge because of the inexpensive equipments (Wagner, Beimborn and Weitzel 2014). These initial investments are sometimes unaffordable for smaller organizations and they are not able to implement information technology in their business.
- c) Eradication of Human: Information technology has lowered the work of human beings. This is leading to eliminations of people from jobs as machines are doing the job easily and much faster (Lee, Son and Kim 2016). People are even losing jobs for this technology and this makes it less popular amongst many organizations.
The above mentioned statements clearly defines the several dangerous disadvantages of information technology.
The item or good that is bought to gain higher profit in the future is known as an investment. The item or good bought is not utilized in the present day and is stored for the near or far future (Otim et al. 2012). This is similar to keeping money in banks with the hope of obtaining interest in the future. In financial world, the economic advantage that is utilized to gain profit in the business or organization is known as investment. It is assumed to bring financial gain in future or can be sold at higher price for more profit. In a finance market, the advantage that is obtained from any kind of investment is known as return. This return comprises of interest, dividends, capital gain and investment income. Investment can be defined as the expenditure of money in any asset to achieve profit in future (Keller and Heiko 2014). Organizations invest their money in various projects in the hope of gaining profit from that particular project. Investments in Information Technology are also needed for any organization. The shareholders and the managers of the organization usually make the decision that which information technology policy should be invested and would be good for the business (Bloom et al. 2014). It is an extremely important job to understand which one will be good for the organization. There are mainly two distinct possibilities of this selection of policy. They are as follows:
- i) The main point that comes in mind of every investor or shareholder of a company is the price. They normally wait for the correct time for investment with the lowest prices (Wagner, Beimborn and Weitzel 2014). The most advanced version is selected in cost effective way so that the business does not incur much expenses. They usually do a market survey that any new advancement is coming or not in near future as once, the investment is done; there is no scope for backing out. Huge money is invested in such cases and investment of such bulk amount of money again will cause extreme loss in the economical state of the business.
- ii) The second possibility that can occur due to the investment is that once the investment is done and the implementation is completed, there is a high chance that the version implemented in the business, can become out dated and obsolete (Holtshouse 2013). This possibility will be a huge loss to the organization and there is a chance that the investment will not bring any profit to the business.
Therefore, before investment in any policy of Information Technology, a stable and practical decision is to be taken by proper IT engineers and shareholders. The above-mentioned two possibilities are evaluated in the first position to check the possible outcomes of the investments.
Information Technology and the organization have an interconnection between each other. Any organization cannot achieve their organizational goals and objectives without introducing information technology in their business (Otim et al. 2012). It is the technique, by which an organization gets to know the shortcomings in their production. Information technology is the main strength behind the necessity of alterations in the procedures of the business and the cultural diversity within the organization. This relation and the combination of both can bring major success in the business and can bring enormous profit.
Disadvantages of Investing in Information Technology
Information Technology brings various profits in any organization. There are several reasons that define why investments should be done in technology. The needs for the investment in information technology are as follows:
- i) Competitive Advantage: The main reason of investing in information technology is that it provides competitive advantage to the organization (ABUBAKAR and Tasmin 2012). When two organizations are manufacturing and producing same products, the one, who have better information systems in their business, will be getting better advantage in the production of the organization.
- ii) Advantage in Long Term Plan: A stronger Information Technology infrastructure is always better for any organization. This type of IT based infrastructure plays a significant role in the betterment of the strategies of the organization (Pratt et al. 2012). This ultimately helps in the long term plans and long term investments of the organization.
- iii) Existence of Organization: Information Technology helps to maintain the existence of the organization with ease. It reduces the complexities of storing bulk amount of information and data in traditional file systems and thus organizations have longer life.
- iv) Cost Effective: Organizations require such a system that is cost effective and beneficial for their business (Keller and Heiko 2014). Information technology is the best answer for this problem. It is extremely cost effective and the maintenance cost is minimal. Although the initial investment for this system is a bit high because of the expensive equipments, but it is a one-time investment scheme (ABUBAKAR and Tasmin 2012). Thus, it can be claimed as cost effective and an important requirement or the company.
- v) Government Regulations: The investments in Information Technology is highly needed for the regulations of the government.
- vi) Increment in Productivity: The production of any organization depends on the employees and the modern technology (Vaishnavi and Kuechler 2015). The employees are able to improve the productivity and show their efficiency by the modern technology. Information technology plays a very important role in such cases. It provides the latest technology to the business and this feature saves time. Since time is saved, productivity is increased in huge manner (Bloom et al. 2014). Even the employees become happy with the technology, as they are able to show their skills in their work.
- vii) Improvement in the Quality: Information technology helps to improve the quality of the products and services delivered by the organization. The organization is able to understand the position of their products in the market and thus is able to improve the quality of the product according to the requirements of the customers (Ritzhaupt et al. 2013). This survey even helps the customers to get more and more attracted towards the product.
- viii) Better Customer Services: Information technology helps to connect with the customers with the modern technology. They are able to contact the manager and the business administrator easily with communications technologies like the emails, telephones, audio and video conferences (Laudon et al. 2012). The organization is able to solve their problems easily with the technology and thus this is generating a good will of the organization in the market.
- ix) Improvement in Flexibility: Information technology makes the business scalable and flexible and thus is popular for all organizations.
- x) Improvement in Employer-Employee Relation: Any organization becomes successful and popular because of the better relationship between the employee and the employer (Willcocks 2013). The information technology helps to improve the relation between the employee and the employer through the advanced technologies. This is another major requirement of the investments in information technology in any organization.
- xi) Improved Corporate Structure: Information technology helps to improve the corporate structure of the organization through the modern technology (Talebian, Mohammadi and Rezvanfar 2014). This is another requirement for the investment in information technology.
- xii) Decision Making: Decision-making is one of the major step in any organization. Information technology helps to improve the decision making capability of any organization (Pratt et al. 2012). This is another requirement for investing money in information technology.
The above statements clearly define the needs and the requirements of investment of information technology in any organization. Introducing IT in an organization will help the organization to achieve the organizational goals and objectives.
Information Technology plays the most important role in any organization for achieving the goals and objectives of that particular organization. Prioritization can be defined as the arrangement of several options according to their importance in life or work (Schwalbe 2015). These options can be anything. It can be an item, a situation, an individual, or any policy. Any organization has two types of priorities in their businesses. They are as follows:
- a) Strategic Priorities: The strategic priorities of any organization are the significances that are structured with the goals and objectives of the organization. The strategies of the organization are the main and the most important components that help to obtain the goals. These priorities are directly related to the customers of the organization (Otim et al. 2012). They help the organization to understand the shortcomings of the organizational goals and how they can be achieved. Cost control is an important strategic priority that helps to focus on the economical state of the company (Buabeng-Andoh 2012). The strategic priorities are altered and modified time to time with the alteration in the organizational strategies.
- b) Universal Priorities: the universal priorities of any organization are the utilities, which have the focus on the employees (Rivard and Lapointe 2012). These priorities are those sections where the organization requires focusing to achieve a better workforce. These utilities are universal to all companies and they help the employees to be more engaged in the business and thus bringing more productivity. The universal priorities comprises of various utilities like the trust, communication, ownership and achievement (Chae, Koh and Prybutok 2014). These priorities even enable the competitive advantage in any organization.
Information Technology is also considered as a priority in any organization. It falls under the category of strategic priorities. It is considered as the strategic priority because it helps to obtain the goals and the objectives of an organization (Venkatesh, Thong and Xu 2012). It is utilized as a strategy in the business. The major utilization of information technology is the technological field and decision making field of the organization. It is kept in the top section of the priority list in any organization and it is given highest priority amongst the strategic priorities (Willcocks 2013). Every organization should implement information technology in their business and should keep in the top position in the priority list.
Information Technology is important for all organizations. It helps to attain the organizational goals and objectives. Any organization before investing in any information technology policy should consider two possibilities. The first possibility is the investment of huge money in the installation and the second possibility is the loss of money in the project. Modern technology is changing day by day. It is recommended that any organization should check the possible outcomes before investing in any project. The main motto of any organization should be like this that they will install such an information technology policy that would be cost effective and at the same time will be of latest technology. They should go for a market survey before installing any such system in their business so that they will not regret later. Once invested in such a large project, it is almost impossible step back. Therefore, it is recommended that the policy makers of the organization should look into the matter thoroughly and invest in proper policy. The second possibility is more dangerous than the first one. This possibility occurs when the implementation of any information system is completed. There is always a high chance that the information system installed in the organization, can become obsolete and out dated. This will bring huge loss in the organization, as they will have to install all of it again. Therefore, it is highly recommended that latest technologies should be installed and introduced in the organization so that no such cases occur. In addition, the Information technology engineers should look into the matter that the policy that is to be installed is popular in the market and has positive and good reviews. It should not be a brand new technology as it can back fire the whole scenario. All these recommendations can help the organization to attain and achieve the organizational goals and the investments would not be a loss.
Recommendations for Investing in Information Technology
Therefore, from the above discussion it can be concluded that, information technology is the basic implementation tool and technique for any organization. It helps to achieve the organizational objectives easily. It has several benefits like the cost effectiveness, time saving technique, increment in productivity, improvement in the file management, improvement in storing of data and information, improves communications, improvement in management in finance department, improvement in the business to customer relation and improvement in the advantage of competition. In spite of having so many advantages, information technology does have many disadvantages. The main disadvantage of information technology is the security breaches. Another disadvantage of IT is the data integrity. These disadvantages sometimes make IT less popular amongst various organizations. The report contains a brief description about the information technology, its advantages and disadvantages. The report also helps to understand the needs and requirements of investments in information technology. It is needed for various reasons and this makes it important for any organization. It falls under the category of strategic priorities of an organization and can be claimed as one of the top most priorities in the organization. The report further provides specific recommendations that can help a particular organization to achieve its goals and objectives and without making any loss in their investments.
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