Strategic & Managerial IT Issues
Businesses are created to make a profit and create value for stockholders, customers, and employees. All businesses have a need to manage data and to turn raw data into information that is useful to the goals of the business. Information technology is a necessary engine for operating most businesses. Building and maintaining the systems that provide the information technology infrastructure for an organization require careful planning and strategy. Business leaders must balance cost, resources, efficiency, security, and complexity. Cost, staffing, return on investment, outsourcing, and technology controls are only a few of the complex decisions that must be made at strategic, tactical, and operational levels of management. The global impact of IT is staggering, and IT expenditures and operating budgets continue to rise steadily each year. The pervasive nature of technology and the rapidity of technological innovations continue to make information technology a critical concern for business leaders. The need for speed and accuracy of information within the business world will continue to create the need for efficient IT systems that deliver data on demand.
Keywords Information Technology; Strategic IT Management; Technology Issues
Business Information Systems: Strategic
Information technology (IT) has evolved into a requirement for businesses and organizations of all sizes and types. It allows communication, analysis, and management of all business functions. The rise in organizational dependence upon information technology has increased the cost to manage and maintain the required IT infrastructure and personnel. The complexity of information technology has stressed all aspects of organizational resources and has become a key consideration in the business planning process.
The San Diego State University Glossary of Academic Information Technology Terms defines information technology by stating that it "includes matters concerned with the furtherance of computer science and technology, design, development, installation and implementation of information systems and applications." Information technology is complex because it is not one single application or computer, but rather a dynamic system that is built to provide businesses with a way to harness, manage, and control the information and data that concerns the business. Laudon and Laudon (2001, p.12) suggest that information technology can be thought of as "one of many tools managers use to cope with change." The authors go on to suggest that three technologies make up the infrastructure of IT and include computer software, storage technology, and communications technology.
Business leaders must define, prioritize, and consider various information technology issues at both strategic and managerial levels in order to adequately manage company resources and lay the groundwork for future growth. Business managers are constantly being challenged by stockholders, employees, customers, and competitors in efforts to create value. Value is an often intangible quantity that represents the ways in which a business can provide a solution to customer problems and at the same time provide a financial return or economic value for the business. The management of information technology directly influences an organization's ability to deliver value consistently. It does not matter whether that value is in the form of monetary profit, labor productivity, new product innovations, or speed of service delivery that is greater, faster, or cheaper than competitors. IT affects how products are made, services are delivered, how employees are paid, and how customers are communicated with, billed, and analyzed. There are few functions or business activities that are not tracked or supported by technology.
Gartner Inc., an IT research firm, projected worldwide IT expenditures to total nearly $3.7 trillion in 2013, representing a 2 percent increase from 2012 (Gartner Worldwide IT Spending Forecast, 2013). Of that total, global expenditures on telecom services amounted to $1.65 trillion, IT services to $926 billion, IT devices to $695 billion, enterprise software to $304 billion, and data center systems expenditures amounted to $143 billion. Information technology is a major expenditure and a significant investment for businesses.
The complex management of information technology has led to an increase in the number of jobs in the field. Outsourcing or contracting with external companies to perform internal tasks has been used successfully for IT tasks because of the widespread use of computers and computer networks. Having a computer on a network means that information can be accessed from anywhere and delivered to anyone somewhere else. Networks or connected computers have redefined the traditional definition of work. Work in prior years had to be done on a specific schedule at a specific location and during certain hours. The linking of computers via networks has allowed businesses to respond to the need to operate their businesses seven days a week and twenty-four hours a day without regard for time zones or specific individuals handling the business of the company.
The Evolution of Information Technology
Information technology has evolved within the realm of business. Once like a foreign language and separate from business operations, technology is now central to every department, every function, and almost every employee’s job. Stair and Reynolds (2001, p. 284) noted that all users, whether managers or employees or technologists, should care about the development of information systems because all will be affected by them.
Once personal computers and PC productivity applications became common in the office environment, the knowledge of technology pushed beyond IT specialists and into the user community. Once the user community became familiar with the power of technology, that group began to demand more functionality and even greater control over decisions regarding technology. Simple access to the Internet and the development of web-based applications drew more by users and multiplied the pressure on internal application development. The ability to source, monitor, and influence technology was no longer the purview of purely technical professionals.
Many organizations grappling with the management of information technology began to shift the information technology function from finance departmental control, to its own department, to being integrated within each business unit. Others even experimented with outsourcing the function. At the same time, businesses have needed to hire and invest in people who speak the language of IT. While understanding information technology is important, it is also important to understand technology in the context of the industry in which the organization operates and the marketplace the organization engages. A conflict arises because people in technology often conduct themselves in ways that are amenable to technology and technologists alone. Conversely, business-oriented employees want technology to perform specific tasks within cost guidelines and do not always have regard for the long-term technology impact.
As a result, businesses have a hard time finding people who understand technology as well as the business. Information technology gained prominence from a strategic planning perspective once technology managers were a part of the strategic management team with representation by C-level executives such as chief technology officers or chief information officers. Having managers at the strategic level of an organization gave IT credibility and made IT issues more visible. IT is almost a business within a business and requires skilled professionals at all levels of management and implementation. Kwak (2001) discussed the reluctance with which IT was welcomed into the corporate strategic arena:
"When chief information officers (CIOs) first entered the executive suite, some fifteen years ago, they were not exactly a popular addition. 'More comfortable with computers than people' was a common verdict on CIOs who advanced through the information systems ranks. Employers seemed to face a simple trade-off: CIOs with depth and breadth of technology expertise or those with general business and interpersonal skills, such as the ability to exercise influence within the organization."
Information systems are not automatically created and involve a complex web of hardware, software, policies and protocols, standards, training, users, application developers, projects, and costs, to name just a few. The confusing system is assisted in its complexity by many competing interests and events outside of the organization. Companies are besieged with the interests of vendors, consultants, and integrators as well as the speed with which technology evolves or becomes obsolete. The compatibility of systems and the ability to operate across various hardware and software platforms can be difficult to manage. All of these make the job of managing technology difficult because it can be a full-time job just to understand the terminology and keep up with the changes. In addition, many of those from whom business and technical managers get information have a vested interest in getting businesses to commit to a specific direction.
Technology decision-making occurs...
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