IS INFORMATION TECHNOLOGY A PROBLEM SOLVER?“

“It has become appallingly obvious that our technology has exceeded our humanity.”

(Albert Einstein)

Introduction

Information technology (IT) has a large impact on productivity growth which has been widely studied during the last decades and the result is that IT adoption makes firms more productive. Firms increase their efficiency of production as defined by the ratio of output to input. Inputs are all the resources an organization use to produce the end material such as labor and raw material. Therefore, productivity growth comes from new technologies and new techniques of production and distribution. At a time where consumer’s needs and desires are changing frequently, to meet this change organizations need some techniques to fulfill what consumers demand? As competition and globalization are highly strong, the needs of organizations, their structures, the tool or equipment’s they use also begin to alter as well. Information technology is an important tool especially for public organizations because these public organizations operate on taxes so government needs to reach at the lowest possible input level and increase the output to the maximum level as their main aim are both effectiveness and productivity. Productivity differs from firm to firm. Productivity from Information Technology depends on whether the firm is ready to invest in new technology and it depends on the firm’s organizational structure, means that whether the firm is in the correct order to absorb the changes from Information technology or not. However, if a firm is ready for being responsive to changes, it requires time and detailed consideration for answering “how to catch up with the change?” organizations having both production cycles, bureaucracies, and hierarchies; it seems they are incapable of fast response. At this stage, information technologies (IT) combining all stakeholders of an organization (like employees, customers, suppliers, and shareholders), helps organizations to respond to changes as quick as possible. Information technologies can be simplified by a sentence of Pushing/extending the boundaries both within the organization and also in the external environment. This issue questions the firm whether Information Technology brings more advantages to them or more disadvantages. It will be correct to say that firms using Information Technology attract advantages to the organization but also creates disadvantages to them as well.

When we talk about IT we cannot forget Research and Development. R&D activities become extremely important for those firms that use IT in their production processes. Such as equipment and stations within factories, entire manufacturing enterprises, and networks of suppliers, different functional departments, partners, and customers located throughout the world can be more effectively connected and integrated through the use of information technology. This is because the product design and development are part of R&D activities. It is important for firms to modify and change their product designs very frequently to meet the fast changing market demands. Production processes based on IT can be easily altered to accommodate the new product designs, thus adding a new dimension to R&D activities. Firms that use IT and are using programmable equipment’s in the production processes need to develop efficient and user-friendly customized application systems which is suitable for their business and makes the functional process easy. The long-run productivity growth effect of IT is higher in industries where inputs more actively flow away from unproductive firms toward productive firms.

Business executives should recognize that IT investments must be given importance just like any other capital investment. While increased IT spending might be necessary for greater IT business value, it is far from being sufficient. There are clear advantages from adopting IT management practices that ensure a closer alignment between IT and the goals of the business. 

When we compare it with the classical design of organization, where higher levels of centralization and formalization are available, IT makes a smooth transition toward a more organic structure of organization. By the term organic organization, it means that there is more decentralization, empowered roles, lower levels of hierarchy where employees have rights to take decisions on their own are available in the organization. For instance, the huge change in FritoLay has encountered was due to hand-held computers for route drivers and an extensive corporate network to distribute date. Therefore, limitations mainly in the ordering and delivery was overcome.

Advantages

Firstly, the members of a group of people or a department can be scattered throughout the world, feeling as if they are working together physically. For instance, Electronic Data Exchange (EDI) makes the ordering process faster and resulting in higher positive rates of customer feedback in a flower company in California, Calyx and Carolla. Another way of using IT in the organization, which are the most widespread channel, are e-mail, video, electronic conferencing and fax that are examples of technological matrixing. Additionally, in assembly lines where long processes integrating technology with human labor, there production automation technologies can be used. They are used for the use of technology to automate processes, monitor the defects before launching it into the market. Not only, IT is used as assisting managerial relations such manager’s span of control is increased efficiently, but also it does form links between workers in the workplace providing a setting of developing communication and motivation.

By implementing a well-developed IT tools including computers, communications, video conferencing, and artificial intelligence etc., task forces, liaison agents become unnecessary. That’s why, even though determining the right type of technology and implementation, adaptation to it can be costly for a firm; in the long run it prevents costs of outsourcing agents, bureau veritas. 

Secondly, one way of job separation to get benefit from information technologies, specialized groups can increase value of business. Groups can be divided for processes because researches show that process centered perspective, structuring of an organization’s processes, information systems, personnel and organizational sub-units, so that they align with the organization’s core goals and strategic direction.

 

Thirdly, Information technologies provide great help in identifying and solving problems for managers. With the help of IT tools, manager can analyze the data and propose for a solution. Using information technologies create value for company in terms of communication between customers or suppliers. Information technologies provide many benefits for different business activities. 

In addition to this, information technology has helped the organizations to maximize the efficiency because it reduce operating costs, develop productivity, help to follow changing market needs and easy to access customers since it offers self-service options. Operations management mostly work on developing information technology by considering the company’s situation. For example, Bayer et al states that companies use e-services about billing. South Carolina DMV failed in operations management while relying on paper work instead computerized data. It made difficult for them to find the specific information and data from piles of books which had data in them. This made them inefficient. Moreover they use technology’s benefits in service delivery. In fact today’s companies which have both front and back office -such as banks, started to use technology in front office as well since it increases the efficiency.

The most problematic transition is faced by traditional organizations, where the budget for these technologies is kept at a minimum level. Although it has the potential to reduce layers of management, improve coordination, and reduce paper handling. For instance IBM is at risk nowadays, due to declining market share and having bureaucratic problems due to its competitors’ being advantageous compared to him. As their competitors have started using information Technology in their production process which have made them more efficient in terms of cost of the product.

Disadvantages

Technology’s increase in front line, caused front line personnel’s to be dismissed and also moved face to face interactions away. However Delene and Lyth case study claims that the data will be more direct and will reported faster. Also, some systematic issues on technological systems can prevent or slow down the going of companies. In this cases, operations management researchers study the interface between technology and service operations. At the same time, information technology work on improving systems and eliminating the problems. The advantages and disadvantages can be different from firm to firm. For example restaurants would face with less problems than banks do. However in any case operations management and service operations work on strategic planning. By doing that companies can maintain a good application of information technology and service operations concepts and provide productivity, faster delivery and service.

Additionally, the introduction of digital technology in the photography industry in the early 1990s increased the entry of new firms equipped with new technology. Due to this change new technology shifted the base of technological knowledge from chemical to digital, which challenged incumbents by destroying the value of their accumulated knowledge and skills in the old technologies, creating a performance gap between new entrants and old established firms (Hyunbae et al).

Furthermore, running an organization with the assistance of Information technology may have instant Intel which can simplify exhausting, lasting for week’s complex processes and reduce their period in a minute or two. To exemplify, traditional methods of having an inventory count may take weeks of large organizations, does not even need to mention the reliability on counting one by one, but with the assistance of Information Technology, you can track your current inventory by just looking the computer’s screen. That’s one of the significant change which affected the whole processes of an organization thanks to Information Technology. But there are several intangible factors that are still affecting an organization and yet to count them inside the equation. Like introducing to a new market, what might be the consumer’s attitude towards the new product or what should an organization do in order to maximize the efficiency by increasing the motivation of its units. They can do survey, they can do trial and error but still they are not enough to be hundred percent sure. Even the smallest odds may break the equilibrium. 

This paper tells us the impact the impact of information technology (IT) on productivity. Information technology is an important tool especially for public organizations, which aim both affectivity and productivity. Furthermore, it tells how Information Technology and R&D are correlated. This is because the product design and development are part of R&D activities. It is essential for firms to modify the product designs very frequently to meet the fast changing market demands. There are clear advantages from adopting IT management practices that ensure a closer alignment between IT and the goals of the business. The members of a group of people or a department can be scattered throughout the world, feeling as if they are working together physically. By implementing a well-developed IT tools, task forces, liaison agents become unnecessary. However information technology can also cause some problems. Technology’s increase in front line, causes front line personnel’s dismiss and also moves face to face interactions away. Information Technology has a long distance to go, and it requires specific modifications to apply on the exact problems which it is modified for. Information Technology has gained a seat inside every organization that are focused to move on to the future. And still have many blind spots remained untouched. So to conclude it is correct to say that Information Technology have helped the firms in increasing their productivity and efficiency but the same time IT have disadvantages for the firms of using it.

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