What Is the Role of Information Technology in Business?

What Is the Role of Information Technology in Business?

How does IT change the business landscape? In this article, we’ll look at the ways in which IT protects and enhances information, improves communication, and increases competitive scope. IT’s impact is enormous – it can transform the business environment. However, understanding the key role of information technology is important if you’re thinking of entering the IT industry.

Here are some examples. The first example is Louisiana Oil & Tire. This company turned all ten of its salespeople into telemarketers.

IT creates new businesses

As industries move towards more information-based products and services, information technology can lead to new business models. The use of computers to study various variables allows more precise analysis and control over the factors that affect the final product. For example, a computer model helped Hunt-Wesson to make informed decisions about distribution- center expansion. This computer model helped the company evaluate many more scenarios and alternative strategies. Similarly, the use of computers for designing cars helped Sulzer Brothers improve the design of their diesel engines.

Information technology also spawns new businesses within existing ones. A company that has an in-house capability for information processing might have skills and excess capacity that it can sell to outside companies. Sears, for example, took advantage of this skill and sold its services to Mellon Bank and Phillips Petroleum. Another example is A.O. Smith, which developed an expertise in data-communications and won a contract to run automated teller machines.

It enhances communication

Modern communication technology has made work easier and reduced operating costs for businesses. Companies can now communicate instantly and across vast distances, resulting in fewer meetings and reduced decision-making time for managers. This technology has, however, come with a price. It has resulted in the redundancy of some jobs, as well as issues with privacy and the skill level …

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