The use of information technology in business has a wide range of benefits for businesses. In addition to enhancing product performance, it can also help companies develop new industries. By lowering costs, businesses can take advantage of information technology’s scalability and sell extra capacity to third parties, generating new revenue and improving their competitive position.
Below are some of the benefits of information technology in business. To learn more about these benefits, read on!
Enhances product performance
IS technology is changing the rules of competition. Once an aerospace supplier competed on the basis of quality, rush orders, ability to meet customized requests, and cost, IS technology has radically changed the rules of the game. A new CAD-to-CAD link and the use of numerically controlled machine tools have negated the value of differentiation, and overall cost is now more important than ever. The following are some examples of how IS technology has changed the rules of competition.
Increasing business efficiency. Investing in information technology can improve the productivity of companies. IT can improve efficiency and productivity, but its value is dependent on a number of external and internal factors. For example, IS can reduce the amount of work that humans must do by eliminating human middleware. Furthermore, IS can help companies make more informed decisions based on market research and customer feedback. For example, IT can help companies make better marketing decisions, since online advertising can measure clicks and provide better information.
Speeds up market for new products
By speeding up the market for new products, information technology helps companies identify customer needs more quickly. By increasing the efficiency of production and responding faster to changes in the environment, companies can increase their market share. In fact, IS technologies can cut costs by more than half and reduce inventories by as much as 80 percent. The information industry is huge and currently accounts for more than $30 billion in annual domestic revenue. The largest players in this industry include radio, newspapers, and magazines.
IS technology has also changed the basis for competition. Once an aerospace supplier competed on quality, speed, and ability to meet rush orders and customized requests, they were largely based on cost. Now, however, the CAD-to-CAD link and the use of numerically controlled machine tools have eliminated the value of differentiation and increased overall cost. While this shift is undoubtedly beneficial for manufacturers, it can also make competitors’ products more complex and expensive.
Creates new industries
Information technology (IT) is transforming our everyday lives and creating new industries. Companies are creating new jobs, bringing down wages, and enhancing the productivity of old industries. These companies will use their superior productivity to destroy competitors, revolutionize industries, and drive the economy forward. For example, Amazon’s rise hollowed out the retail industry, while Uber and Airbnb disrupted the hospitality industry. Alphabet’s driverless cars could soon be rolling off production lines powered by Google Maps data.
Telemedicine could revolutionize rural health care, and MOOCs could drive down the costs of higher education.
While the direct role of technology in creating jobs is well known, its indirect impact is less well- known. New technologies create jobs in the service and knowledge-based sectors. According to the McKinsey Global Institute, the growth of the service sector in the United States is causing the displacement of substantial occupations and creating new jobs in their place. In fact, the services sector has been the fastest-growing sector since 1880.
Fosters innovation
Today, information technology has become a necessary part of everyday business operations. Most businesses rely on IT to perform tasks, and technological problems can hamper work flow and daily output. When deadlines are missed, these issues can reflect poorly on a business. To stay ahead of the competition, businesses must develop innovative ways to use IT. Here are three ways to make the most of information technology in your business. a. Make sure you use it to its full advantage.
Increased general intelligence. Research from the Flynn Effect shows that, since the 1930s, the general IQ of humans has increased from 80 to 100 points. This trend is attributed to improvements in travel, multimedia, and computer applications. Also, the global brain has improved learning speed. As information technology continues to improve the lives of people, it can help rural areas thrive. Similarly, environmental and sustainability issues also require innovative solutions. As consumerism spreads, the planet suffers. While the increasing consumption of innovative products may lead to economic growth, they also affect the environment and threaten the future of the planet.
Creates team dynamic
The use of information technology in business creates a team dynamic within a company. By allowing employees to collaborate with each other even when they are in different locations, this technology helps to reduce tensions within the workplace and encourages workers to overcome their differences. However, most modern businesses are under constant threats of security breaches, so the use of information technology within the company is essential to ensure the security of financial data, confidential executive decisions, and proprietary information, which often leads to competitive advantage. For example, computers can be protected with passwords, preventing others from copying ideas.
New technologies have a significant impact on team dynamics, and the use of these technologies has also had an impact on how leadership is shaped. Digital platforms, such as social networking sites, facilitate team formation and are often used in business settings. They aid team dynamics by making the process more convenient for individuals. Digital platforms also facilitate the process by allowing employees to interact with each other more efficiently. This helps teams become more dynamic, and facilitates the development of new leadership styles.
