IT Outsourcing in a Precarious Economic Environment

With the downturn of the global economy, many companies tend to cut expenditures in IT development. This could potentially have a huge impact on IT companies. However, according to the article Infosys Boss: Outsourcing Will Increase, Gopalakrishnan, CEO of Infosys Technologies, is optimistic about the future. Instead of cutting back the workforce, he is looking to seize new opportunities in the IT industry.

Goplakrishnan admits that the impact of the AIG bailout and Lehman's bankruptcy have hindered business and he does not see this as something the economy will overcome quickly. Many of his clients are looking to outsource more of their businesses especially to India. Total IT spending is approximately 800 billion dollars. Of the 800 billion, 250 billion comes from outsourcing, 5% of the 250 billion comes from India.

Infosys Technologies is encouraging more of its clients to implement a global delivery model (GDM). Ninety percent of business comes from within the US and Europe. Infosys hopes to expand business into healthcare and governments sectors.

Many IT companies reduce spending in R&D during periods of economic slowdown. However this company is putting more into development, specifically for IP solutions and value added services. Not only will this give them a competitive edge, it also provides jobs that may otherwise be eliminated.

Source:http://www.businessweek.com/globalbiz/content/nov2008/gb20081121_592979.htm

Critical Success Factors in Agriculture

The text book for this course defines critical success factors (CSFs) as "the things that must go right in order to ensure the organization's survival and success."

An article by Don Hofstrand found in Ag Decision Maker addresses the possible CSFs when transferring the business of a two generation farm. Some of the critical success factors include:

• The parents or older generation must be ready to share with the younger generation. It is often difficult for the first generation to relinquish control to the second generation. Also, the first generation will most likely take an income reduction.


• The second generation must be committed to farming. Sometimes children are inclined to "try it" to please their parents. They must really be committed. Also, one should consider the marital status of the second generation. If he/she is already married then the spouse needs to also be committed to farm life. If the person is single, the fact that a future family member may not like farm life needs to also be a consideration.


• All family members need to have the same vision for the business.


• The business needs to be lucrative enough to support all parties involved.


• Compatibility is also important. The first and second generations need to work well together. They also need to be able to separate personal issues from business issues. When working closely with family members, the lines between personal and business issues can often be blurred.


• Agreements that unfairly favor one family member over another should be avoided.

The article suggests, in the agricultural industry, to establish a trial period of 2-3 years if the parties have not worked together extensively in the past.

Sources:

http://www.extension.iastate.edu/agdm/wholefarm/html/c4-12.html

Turban, Leidner, McLean, Wetherbe. Information Technology for Management Transforming Organizations in the Digital Economy. 6th ed. John Wiley & Sons, 2008.

Artificial Intelligence used in Surveillence Technology

article: http://www.marketwatch.com/news/story/Prescient-Group-LLC-To-Introduce/story.aspx?guid=%7B7839A171-D4FB-4100-8A2F-8D4AB3D98B28%7D

Prescient Group, LCC is getting ready to release iSentry, an artificially intelligent video surveillance system. This system could be of particular interest to homeland security, the hospitality sector, defense, energy facilities, and other general businesses. What makes this system special is that it learns normal activities that occur within the video camera's scope. The system displays a black screen until unusual activity occurs. Then depending on parameters set by the system operator, different actions may take place, such as email notification or system lock down. This system is currently able to filter out 95% of normal activity.

According to Prescient's co-founders there are five things that set iSentry apart from most other systems available:

1. It can detect unusual activity.

2. iSentry has multiple camera capabilities. Multiple cameras allow the controller to shift priorities without missing other important activities.

3. iSentry has active pan, tilt, and zoom features. This allows the cameras to automatically track suspicious targets, providing more detailed information.

4. The system has a long memory archive. The cameras use a low resolution which ends up conserving 90% of disc space.

5. iSentry has accurate outdoor detection. It can can pick-up small motion in an outdoor area, in all kinds of weather.

Prescient is currently working with NYC to use this system in traffic monitoring, i.e. in tunnels. The uses for iSentry are vast.

Source: "Prescient Group, LLC To Introduce iSentry, Groundbreaking Artificial Intelligence Video Surveillance Technology, at 15th World Congress of Intelligent Transport Systems Meeting." MarketWatch. 18 Nov. 2008. Retreived on 25 Nov. 2008.
http://www.marketwatch.com/news/story/Prescient-Group-LLC-To-Introduce/story.aspx?guid=%7B7839A171-D4FB-4100-8A2F-8D4AB3D98B28%7D

10.3 Knowledge Management Activities

It is important for information to be organized and accessible, especially in large corporations. Historically, there have been problems with locating information. An example of this is when employees leave a company and it becomes difficult to locate certain information that the employee created or edited. Knowledge management systems are used to organize information. Most of these systems serve one or more of the following purposes:

• to make knowledge visible through the use of maps, hypertext, and yellow pages.


• to develop a knowledge intensive culture


• build a knowledge infrastructure

Knowledge Creation

According to the textbook, "knowledge creation is the generation of new insights, ideas, or routines and it can be viewed as the interplay between tacit and explicit knowledge."

The four modes of knowledge creation are:

• Socialization mode is when new knowledge is created through social interaction, such as conversing with another member in the organization. The sharing of tacit knowledge.


• Combination mode is when new knowledge is created by merging, categorizing, reclassifying, and/or synthesizing explicit information


• Externalization mode, one creates new knowledge by transferring tacit knowledge to explicit knowledge. Example, documenting a process that was used for a client.


• Internalization mode, one creates tacit knowledge from explicit knowledge. Example, gaining an understanding of something through reading a written document.

Knowledge Sharing

Knowledge sharing involves volunteering information including ideas, solutions, and experiences to someone else. This can be done through a middleman, computer, or directly. Due to interoffice competition, some people are reluctant to share their knowledge with others. Some conditions that may encourage the sharing of knowledge include trust, interest, common language. and easy accessibility to experienced employees.

Knowledge seeking or sourcing is when a person intentionally tries to locate and use internal organizational knowledge.

The main purpose of knowledge management is to encourage and facilitate the sharing of information between various individuals and departments within an organization.

Source:
Turban, Leidner, McLean, Wetherbe. Information Technology for Management Transforming Organizations in the Digital Economy. 6th ed. John Wiley & Sons, 2008. p. 396-398.

9.3 Global Information Systems

Interorganizational systems that are used to connect companies or parts of companies located in multiple countries are global information systems. Airline reservation systems like SABRE and electronic funds transfer (EFT) systems are examples of global information systems. There are three different types of companies that use global information systems:

• Multinational companies operate in several counties. Examples include McDonald's and Coca-Cola.
• International companies conduct business with companies located in other countries. An example is Boeing who contracts work from over 40 countries.
• Virtual global companies are joint ventures between business partners in different countries.

Global information systems offer several benefits which are only possible through the use of IT. The benefits are:

• Effective communication at a reasonable cost.
• Effective collaboration to compensate for distance, time, language, and culture.
• Allows access to databases of business partners which allows them to work on projects simultaneously.

There are many obstacles when designing and implementing interorganizational information systmes (IOS). When dealing with a global company, implementation and design become even more complex. Some things to consider are:

• Cultural differences- Culture refers to the accepted values and characteristics of society. This changes from country to country, so when conducting business away from "home," one must consider the cultural environment that he is in.
• Localization-Sometimes companies alter the logo, color, packaging, or size of product in order to be more appealing in a target area.
• Economic and Political differences- An example of this is the different infrastructure from one society to another, i.e. China limits what can be viewed on the Internet.
• Legal Issues-Legal issues include knowing a country's stance on patents, copyrights, computer crimes, privacy, data sharing, etc.
• Web Design for a Global Audience- It is important to insure that a website can be appropriately translated in various countries.
• Globalization and Offshoring of IT Activities
• Globalization and Personnel Issues- Training employees to work in a global environment is very important in operations and in hiring personnel abroad.

Global Supply Chains

Optimizing a global supply chain can be difficult. However, e-commerce has made sourcing suppliers and customers in different countries easier. The obstacles that arise with information systems implementation, are also the causes of supply chain interference. Because a global supply chain is larger than a domestic one, there is more opportunity for a breakdown in communication. IT has helped smooth out the process utilized in a global supply chain. IT provides :

• Communication infrastructure options
• Online help
• Helps locate business partners
• Solves language problems through machine translation or automatic translation.

Financial institutions are also using global supply chains for the exchange of money via EFT, e-payments. Currencies can be converted on a real-time for the most current conversion rates.

Globalization is becoming a more common practice among corporations. Information technologies support communication, operations, and supply chains. Many companies are now outsourcing logistic services to minimizes problems encountered in the global market.

Source:

Turban, Leidner, McLean, Wetherbe. Information Technology for Management Transforming Organizations in the Digital Economy. 6th ed. John Wiley & Sons, 2008. p. 352-358.

8.3 Supply Chain Opportunities

In recent years there have been many progressive changes in supply chain management (SCM). It has now become a common practice to share information along the supply chain, this is known as a collaborative supply chain because the various components work together. Companies that use a collaborative supply chain use master data management (MDM) systems to organize all information. Some providers of such systems are SAP, Oracle Corp.and IBM. MDM systems manage a large amount of information form both internal and external sources.

Example: Wal-Mart is known for its collaboration with P&G.

Managing E-Business
The increase in e-business has resulted in the utilization of the Internet in SCM. Using the Internet for SCM has several benefits including speed, it's less expensive, flexibility, and the possibility of shortening the supply chain. Overall, the increase of e-businesses has improved SCM performance and customer satisfaction.

Electronic marketplaces allow identification of upstream suppliers. E-marketplaces also allow for a better dispersion of resources as well as an increase in shared information.

Supply chain participants in e-businesses are also using electronic ordering and funds transfer (EOFT) and advanced shipping notice (ASN) to improve customer service. These transactions are conducted by using electronic data interchange (EDI).

SCM has morphed from a linear form into a "hub." Companies using linear SCM follow a sequence which can take longer. In the "hub" information is shared and steps can be skipped to expedite the process.

Managing Logistics
Logistics involves the movement of materials amongst the supply chain, including shipping, storage, and inventory management. Fixed management systems uses a technology based system to fully integrate all components of the supply chain. E-logistics involves drop shipping that allows the vendor to ship directly to the end consumer.

Managing Inventory
Inventory management is very important in providing timely delivery of goods. Some companies keep inventory on hand as a type of "insurance". However, this can be expensive to maintain. Collaborative fulfillment networks (CFNs) can be used to reduce inventory and transportation costs. Vendor managed inventories (VMI), the vendor is responsible for storing inventory in warehouses for the manufacturer or retailer.

Collaborative management, if coordinated properly can be more efficient and cost reductive.

Managing Other IT-Assisted Solutions

The supply chain hub has resulted into the formation of supply chain teams. Supply chain teams are comprised of several individuals with their own area of expertise. These individuals then address customer issues within their area of knowledge. For example one person may be designated to address delivery issues.

Virtual factories have been developed to let organizations simulate and make changes to their supply chain design before implementing the practice into the actual factory.

There are now more wireless options like RFID that can improve supply chain issues.

Ethical Issues Related to SCM

Collaborative supply chain management involves sharing information. This must be done in a responsible and secure manner. Also, by eliminating parts of the supply chain, jobs are also eliminated. Long-time employees may be displaced.

Source:
Turban, Leidner, McLean, Wetherbe. Information Technology for Management Transforming Organizations in the Digital Economy. 6th ed. John Wiley & Sons, 2008. p. 307-312.

Shop Around

"Shoppers Using Mobiles to Hunt Deals," is an article addressing how the mobile Internet has affected shopping patterns in the the wake of a financial crunch. Internet shopping is no longer something that is done only at home. Many bargain shoppers are using their mobile devices to compare prices and read performance reviews while shopping in stores. Because the online and in store worlds are merging, retailers are being forced to offer their best prices first or else risk losing business to their virtual competitors. Also, as broadband capabilities improve, employers are finding that employees are spending less time on the Internet at work because surfing the web is no longer limited to the desktop.

Review the article....
http://www.businessweek.com/globalbiz/content/aug2008/gb20080818_284802.htm


Source:
"Shoppers Using Mobils to Hunt Deals." BusinessWeek. 18 Aug. 2008. Retreived on 29 Sep. 2008. <http://www.businessweek.com/globalbiz/content/aug2008/gb20080818_284802.htm>

6.3 Mobile Shopping, Advertising, and Content-Providing

Wireless Shopping


Those who use cell phones and/or PDAs with internet capabilities are now able to use their devices to shop on some websites, such as Amazon.com and mobile.yahoo.com. Many of the same features available to wireline shoppers are also available to wireless shoppers. They are able to compare prices, perform searches, store items in their shopping cart, and execute ordering. Mobile shopping can also be used to order food from restaurants, bid on auction sites such as eBay, and purchase movie tickets. Mobile applications allowing these services include Vendio and gNumber, who partnered with eBay. Motorola partnered with Food.com to allow restaurant accessibility, and ShopWiki is a mobile search engine that allows to user to conduct price comparisons.

Advertising

Mobile computing is allowing advertising to become even more customer specific. Many cell phones and PDAs are equipped with GPS (Global Positioning Systems). Because of the GPS the customer's physical location can be tracked. SMS (Short Messaging Services) messages and paging messages can be sent to the mobile devices advertising information about stores, restaurants, and other attractions that are near to the potential customer.

Another feature advertising concept that is popular in countries such as Singapore, is offering two minutes of free long-distance calling if the mobile phone user will listen to ten second advertisement sent to his/her phone. Mobile phone users have the ability to accumulate up to 100 free minutes. This method of advertising has not yet been successful in the United States.

Mobile Portals

According to the textbook, "A mobile portal is a customer channel, optimized for mobility that aggregates and provides content and services for mobile users." Mobile portals are very similar to the portals used on desktops and laptops, such as Yahoo!, MSN, and AOL. Mobile portals provide news information, e-mail, entertainment, etc. Many of the Mobile Portals also allow customers to download music and games for a fee. In the U.S., the leading companies offering mobile portals are Cingular, Verizon, and Sprint PCS.

Voice Portals

Chapter six of Information Technology for Management states that "A voice portal is a website with an audio interface." These websites are not accessed in the traditional manner. A phone is used to dial a number that will allow the user to connect with the website. The user may ask for information, the website retrieves the wanted data and communicates it back to the user, via computerized voice. An example of a voice portal site is bevocal.com. Users call the site to gain information pertaining to the weather, traffic, restaurants, etc.

These websites are supported by advertisements. So, when a customer calls in, they usually listen to a commercial of some type. Marketers benefit from this because they then have access to the customers profile and can provide targeted advertising.


Shopping, advertising, and content retrievable methods are changing drastically thanks to new wireless, mobile, and pervasive computing. Physical location is no longer a hindrance for conducting business.

Source:

Turban, Leidner, McLean, Wetherbe. Information Technology for Management Transforming Organizations in the Digital Economy. 6th ed. John Wiley & Sons, 2008. p. 220-223.

E.T. can Phone Home....

Internet telephony also known as VoIP (Voice Over Internet Protocol) is a rising trend in businesses today. According to Information Technology Management for Management, section 4.3 on commucnication, VoIP can work in several ways, but first lets look at how traditional telephone calls are made. A person picks up a phone and dials a number which then travels via analog signals along a circuit-switched network. The final destination is another telephone at a specific location. VoIP calls can be made from a VoIP phone or a PC. The call are digitized and travel over packet-switched networks, such as the internet. These calls are not associated with any physical location or device. To place VoIP call, users can use regular phones that are connected to VoIP adapters, use IP phones (which connect to the internet instead of a phone jack), or use software, such as Skype, on a PC or PDA (Turban, Leidner, McLean, and Wetherbe).

This has become a popular form of communciation in the business world. One company that is using VoIP capabilities to its advantage is Dutch express-delivery company, TNT. This company uses 47 aircraft and over 26,000 delivery trucks on a daily basis. Obviously, this requires the use of a large amounts of gasonline and oil. The health of the business is dependent on fuel, so TNT must find other areas to recoup some of the costs incurred by rising fuel prices. Also, TNT recognizes the importance of attepting to offset some of its CO2 emissions in order to shrink its carbon footprint (Schenker).

TNT implemented a program titled Planet Me, which encourages employees employees to reduce carbon dioxide emissions by teleconferencing using VoIP rather than commuting into the office everyday. Videoconferences have also reduced the need for excessive business travel. By using VoIP, TNT employees can work from any location. TNT estimates that the Planet Me program will result in a CO2 savings of 2.6 kilotons a year. Not only is teleconferencing good for the environment, but it also helps TNT employees achieve a better work life balance. (Schenker).

TNT is also saving money through reducing international phone calls. VoIP does not recognize physical locations so there are no long distant charges. If VoIP is used in lieu of traditional telephone calls, companies have the potential to save a considerable amount of money.

Worldwide videoconferencing systems and services market was a 1.63 billion dollar business in 2007. It is expected to grow to $4.2 billion by 2012. However there is some concern that the subprime crisis will result in cutbacks which will reduce spending in VoIP equipment (Schenker).
view article at http://www.businessweek.com/globalbiz/content/aug2008/gb2008085_094217.htm


Sources:

Schenker, Jennifer. "Economic Woes Boost Videoconferencing." BusinessWeek. Aug. 5, 2008. Retrieved Sep. 16, 2008, <http://www.businessweek.com/globalbiz/content/aug2008/gb2008085_094217.htm>

Turban, Leidner, McLean, Wetherbe. Information Technology for Management. 6th ed. John Wiley & Sons, 2008. p.141-142.

Did you mean to click on that?

Did you know when you surf the web companies are collecting data from you? Clickstream data is information that can be gathered by the use of special software on company websites. This lets the company know what kind of things you are interested in, but is this an invasion of your privacy? This is question that has now attracted attention from the "hill."


On August 14, 2008, BusineessWeek published an article titled "Congress to Push Web Privacy."

The article addresses the concern that companies may be crossing an invisible line when it comes to their data collection methods. Companies that utilize clickstreaming software include Google, Yahoo!, and Microsoft. Generally, the information that is collected is used to determine how best to place advertisements on the website. Congressional staff recently asked thirty-three companies to provide outlines on its web-surfing tracking practices. Companies seem to be willing to comply with this request in order to avoid further congressional intervention (Green). However, there is already legislation on the horizon...the Online Privacy Bill of Rights may be introduced in an upcoming session of congress.


View article: http://www.businessweek.com/technology/content/aug2008/tc20080813_306363.htm



Souces:


Green, Heather. "Congress to Push Web Privacy." BusinessWeek. (14 August 2008) 10
September 2008 (http://www.businessweek.com/technology/content/aug2008/tc20080813_306363.htm).


Turban, Leidner, McLean, Wetherbe. Information Technology for Management. 6th ed. John Wiley & Sons, 2008. p.83.

Questions from Minicase 2-2

How TrueCredit Utilizes SOA to Build Fast, Reliable Applications

1. What are the major reasons the company (TrueCredit) had to use SOA?

TrueCredit used Service-Oriented Architecture (SOA) because the changes needed to be implemented quickly(90 days the norm is 180 days). SOA reuses and reconnects existing IT components instead of building a new system. One application is to support 50,000 users simultaneously, which is double the previous capacity. Another objective was to reduce response time from 3 seconds to 1 second.

2. In what ways did they gain competitive advantage by using SOA?

TrueCredit now has the ability to quickly and easily collect and analyze data from several sources. Services such as credit reporting, scoring, and other financial services are offered on both TrueCredit's website and its customers website, giving more exposure to TrueCredit's goods and services.

3. What specific "services" can you identify in a business like this?

TrueCredit is a subsidiary of a national U.S. credit bureau. Companies like this offer credit reports, computes credit scores, and other financial and credit services.

4. Why is it so important to serve 50,000 simultaneous users?

TrueCredit wants the capability to service all customers at the same time without slowing down the system. It currently has the capacity to service 25,000 simultaneously. An objective of any company is to attract new customers and increase business, so in other words, TrueCredit needs room to grow. While it is very unlikely that all customers would use TrueCredit's services at the same time, it needs to have the capability to handle such a situation.

5. Classify this application using the material in Section 2.2.

This application is primarily an interorganizational system because it connects TrueCredit to its customers by storing, analyzing and quickly retrieving financial data when it is requested. Because this application is used to offer services and programs on its customer's websites as well as its own, it could also be classified as a transaction processing system.

Source: Turban, Leidner, McLean, andWetherbe, Information Technologies: Concepts and Management, p.42-72.

Two for the Environment

IT can prove to be very useful in implementing and achieving company goals and missions. Two companies that have set clear goals and use IT in achieving them are Patagonia and Interface. Both companies strive to increase shareholders earnings while also protecting the environment.

Information used was obtained from:
http://www.patagonia.com/ and http://www.interfaceinc.com/


Patagonia's Mission Statement:

"Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis." (http://www.patagonia.com/)

Interface's Mission Statement:

"Interface will become the first name in commercial and institutional interiors worldwide through its commitment to people, process, product, place and profits. We will strive to create an organization wherein all people are accorded unconditional respect and dignity; one that allows each person to continuously learn and develop. We will focus on product (which includes service) through constant emphasis on process quality and engineering, which we will combine with careful attention to our customers' needs so as always to deliver superior value to our customers, thereby maximizing all stakeholders' satisfaction. We will honor the places where we do business by endeavoring to become the first name in industrial ecology, a corporation that cherishes nature and restores the environment. Interface will lead by example and validate by results, including profits, leaving the world a better place than when we began, and we will be restorative through the power of our influence in the world." (http://www.interfaceinc.com/)

Patagonia's Plans

Patagonia produces some of its clothing from organic and/or eco-friendly materials. Some items may also be recycled once the customer is finished using them. Patagonia also sponsors different environmental initiatives both monetarily and by also granting employees time away to work as activists. Some programs sponsored by Patagonia are Freedom to Roam, Arctic National Wildlife Refuge, and Oceans as Wilderness. Patagonia also co founded the Conservation Alliance and gives money annually to other activists.

Interface's Plans

Interface's current plan is titled Mission 0. By the year 2020, Interface plans to have zero negative impact on the environment.

Strategic, Management, and Operations Activities help achieve goals....

In order to be effective plans, goals, and initiatives must be communicated throughout all levels of the company.

Patagonia

Environmentalism was built into Patagonia's business strategy and thus is a vital part of the mission statement. Its founders believe that Patagonia can be a successful company and help the environment simultaneously. Thus all employees from management to product development and manufacturing share the same goals and ensure its implementation throughout all activities. Steps are taken from the design process all the way through manufacturing to protect the environment, and Patagonia constantly strives to find new methods and materials that are less harmful. In order to achieve their common goal.

"We know that our business activity – from lighting stores to dyeing shirts – creates pollution as a by-product. So we work steadily to reduce those harms. We use recycled polyester in many of our clothes and only organic, rather than pesticide-intensive, cotton." (www.patagonia.com)

Interface

While Patagonia's mission and goals were implemented by the traditional "trickle-down" method, Interface's mission and goals were initiated from the ground up. the employees of Interface wanted to do more to protect the environment and formed their own groups to implement change to operations. This made management aware and inspired the CEO, Ray Anderson to adopt these operational practices permanently and continue the efforts for cleaner manufacturing. This idea is now reflected in the mission statement as well as project Mission 0.

Listen to Interface CEO, Ray Anderson on YouTube.

http://www.youtube.com/watch?v=OUG4JXE6K4A

How does IT enhance company activities?

Patagonia and Interface use IT to carry out daily activities and contribute to company goals. The manner in which these two companies use IT is very similar. Both companies use their websites to communicate their mission and environmental concerns to their customers and employees, as well as to advertise their merchandise. Patagonia also has a blog for employees to post environmental concerns and reports. Both companies use their websites to post strides made to achieve their goals. IT also assists in everyday operations. Customers can use the websites to place and track orders. It is also probable that an IT system is used internally to track merchandise and ensure efficiency. IT may also be used to source more environmentally friendly materials to be used in production like organic cotton and recycled polyester. IT can also be used in R&D research to develop better manufacturing and recycling methods.

Does IT Matter?

In a society that seems to thrive on technology, “Does IT matter?” seems like a simple question. However, after a class discussion on the subject and reviewing Nicholas Carr’s article, “IT Doesn’t Matter,” there are definitely two sides to this issue.

IT Pros

IT provides a greener way to conduct business. As people become more aware of environmental issues, pressure is being placed on corporations to follow suit. Companies that utilize information technology (IT) greatly reduce their paper waste by transmitting and collecting data electronically rather than publishing hard copies of all information.

IT systems make companies much more efficient. The way space is utilized is improved. Documents that used to be stored in filing cabinets can now be stored on small chips. Time is also used more efficiently by company employees because access to company data is at their finger tips. Less time is spent tracking down documents that have been lost or misplaced. IT systems also prevent human error, from simply misspelling words to providing a safety net for catching process errors. Making a company efficient saves money in the end.

Industry connectivity and communication can be streamlined. Orders through the entire supply chain can be streamlined. Inventories can be closely and accurately monitored, so that the correct amount of goods is kept on hand. When the supply reaches a certain point, more is automatically ordered. This prevents backorders from stacking up and also prevents storing materials that have been over ordered.

IT systems provide flexibility. Allowing employees to be mobile can increase productivity. Some companies utilize systems that allow employees to work from anywhere in the world. Salespeople can place orders from the “road” or even as they conduct customer meetings, as opposed to the old method of placing orders once they return to their base.

IT Cons

IT causes harm to the environment. While paper waste may be reduced through IT, recycling old equipment has become a problem. Software developers often make programs compatible with “newer” computer models. Companies are continuously upgrading working computers simply to remain compatible with software (Carr 48). The problem then is how to dispose of the equipment. Many so called recycling centers, simply ship the unwanted electronics to developing countries. The remainder ends up in landfills.

IT is very costly. IT can be very expensive to implement if it is done ahead of the curve. It may take a while to recover implementation costs. Maintenance has also proven to be expensive. Technology has become one of the most monetary draining expenses incurred by today’s businesses (Carr 48). After systems have been implemented, companies must then spend additional money and time to train employees. Every time a system is upgraded, more training must occur.

IT makes a company more vulnerable. Computer hackers can steal vital information or embed viruses or worms that could cause a detrimental amount of damage to a business. There has been an increase in computer crimes because it is much more difficult to catch and prosecute the culprit.

IT makes it easy to outsource jobs. Due to the mobility provided by IT, certain jobs such as customer service can be conducted anywhere in the world. Thus, many jobs are being outsourced to places such as India, where labor is cheaper.


The list of pros and cons could go on and on. Whether IT matters or not is greatly dependent on perspective and the nature of the industry in which it is being used.

What is your perspective?

Do the benefits of IT outweigh the negative aspects?

Have we as a society become to dependent on technology?





Source: Carr, Nicholas G. “IT Doesn’t Matter.” Harvard Business Review . May 2003: 41-49.