Importance of Information Technology Management in a Modern Organization
Information technologies play an essential role in achieving the objectives of an organization. We must manage them appropriately to meet the company’s business requirements; otherwise, they will be expensive. Today, one cannot deny the significant role of information technologies in all spheres of organizational management. In management, information technologies are present at all stages of operations. The advantages of information technology in administrative control are especially noticeable.
What is Information Technology?
As a definition, Information technology is scientific knowledge, expressed in practical experience, used for the rational use of a repetitive process. Information technologies of organization management are methods and means of searching, collecting, processing, storing, transferring, and protecting information and knowledge used in management tasks based on software, computer, and telecommunication equipment.
In organizations, we use automated information technologies today with the help of hardware and software. Information technology assists the mechanism for making managerial decisions.
Information Technology Functions
The main functions of information technology management of an organization are as follows:
- Search and collection of data
- Data processing (information analysis)
- Data storage
- Generation of new information for solving optimization problems
It is important to note that information technology automates repetitive data processing operations and generates further information for making management decisions.
We must implement an effective information technology system in the management of an organization. It is necessary to conduct a detailed analysis of the managed object, determine the management tasks, develop its structure, and select the required information. After thorough research, it is necessary to create an information model for managing the organization, which will record the relationship between data processing tasks and new information flows.
Information management technologies are continually reaching new quality levels, and institutes offer specialized programs for students seeking an MBA with technology focus. Such education allows using the latest processing methods and information required for making management decisions. The costs of implementing these technologies pay off and make a profit.
Can Information Technologies Improve Productivity?
In the past, people believed that information technologies did not contribute anything to productivity. However, later, studies revealed the opposite – the proper use of IT can significantly boost productivity.
Robert Solow, an American economist, published an article in the New York Times newspaper in 1987. He said that “the age of computers is everywhere except in productivity statistics.”
After this, companies began to think that large investments made in information technologies would be expenses since they were not investments. Academia and institutions breathed easier when macroeconomic and microeconomic studies found that investments in IT improved productivity.
Information Management Systems
Today, information management systems are essential for managing companies:
- ERP (Enterprise Resource Planning) systems: It is an integrated system, a database based on a single application, and standard user interfaces for financial and business management. It includes several areas of the company such as planning and forecasting, sales management, production management, procurement, finance, etc.
- Customer relationship management systems CRM (Customer Relationship Management). These are systems for managing external relations. In other words, they assist in improving the company’s relationship with its customers (customers), partners, and in general – with the entire outside world. It also includes management techniques to improve sales efficiency. The systems under consideration automate the work of marketing clothes, call centers, corporate portals, etc.
- Information support systems for analytical activities BI (Business Intelligence). These systems act as a storage of analytical data. It also includes the means for processing the necessary information. BI Systems are OLAP systems (On-Line Processing Systems) in contrast to OLTP systems (On-Line Transactions Systems), including ERP resource planning systems and CRM customer relationship management systems.
Norms and Standards
After the business world understood that information technologies help increase productivity and fulfill business objectives, norms, and standards began to emerge that helped manage them properly. It is because poor IT management can mean expenses and failure to meet business objectives.
For this purpose, authorities created techniques and tools to help use them properly. For example, the ISO 38500 standard sets the standards for the good governance of business processes and decisions related to information and communication services.
Individuals having an Information Management Degree acts as an aid for managers and professionals in a modern organization. On the other hand, we also have COBIT. It is a standard that offers a set of “best practices” for the management of the Information Systems of organizations.
We cannot miss VAL IT, which aims to help ensure organizations obtain value from the investments they make in IT. It entails an acceptable cost and a minimum level of risk. It is exciting to know that companies are increasingly adopting IT. They understand that information technology is the primary foundation to achieve the organization’s business objectives.
Some other norms and standards are essential to align technologies with business strategies correctly. Aligning means making technologies work and meet business requirements.
Special Information Systems
There are the following unique systems used in modern organizations:
- Supply chain management systems SCM (Supply Chain Management). These systems help produce complex products that include components from different suppliers. It is essential for enterprises to promptly program the delivery of the necessary parts in full and on time. The system ensures the planning and coordination of supply, transportation, and storage processes.
- Material planning systems MRP (Material Requirements Planning). These systems deal with the procurement, production, and sales of the required materials.
- Human resources management systems HRM (Human Resources Management). The functions of these systems are recruiting, management, and effective use of its employees’ potential. It includes information support in staff training, data on staff, and assessments of their achievements.
The listed systems are independent and open. However, each of the systems can carry individual features of the above methods. Today, we can observe hybrid intelligent systems. In such scenarios, various computer programs utilize artificial intelligence systems. Cognitive information technologies are also actively developing, including information technologies designed to create a person’s creative abilities.
The widespread introduction of modern information technologies contributes to using new approaches and methods for the management process. The use of such technologies in the work of companies is a prerequisite for its effective functioning. Interest in information technology results from the extensive technological capabilities for processing management information, directly affecting work’s economic efficiency, increasing competitiveness and profitability in the service market. The goal of the technology must meet the business requirements. In conclusion, we cannot invest in a technology that contributes nothing to us and does not serve our business; otherwise, it is expensive.