Research: IT Impact on Business

  • Category:
  • Document type:
  • Level:
  • Page:
  • Words:


Impact of Information Technology on Business

Impact of Information Technology on Business


Information Technology (IT) tools have been advancing quickly over the years as the world’s population has been increasing rapidly. The business world currently is progressively becoming competitive and uncertain (Roberts and Sikes. 2011). Times of innovation as well as market growth has been accompanied by rigorous competition, persistent financial pressures as well as unpredicted risks. In addition, in the past half century, there have been an increase in digital computing which has enhanced the rapid growth of the IT industry. For instance, companies such as Coca-Cola, Amazon, Alibaba ANZ and Facebook bank among others. This industry has developed substantially becoming the chief provider tool for business growth which helps motivate the productivity of businesses and automation to name a few (Matos, Afsarmanesh and Rabelo, 2001). There exists an incessant response of business needs and opportunities to technological needs. Therefore, this report will highlight why today’s businesses need IT and its importance to a business. Furthermore, the report will discuss how businesses utilize IT in their daily activities together with the benefits it has to business. It will also discuss the various risks that accompany business and the ways they can monitor IT.

Why Businesses Require IT

Obtaining the best IT support maintains the business running efficiently without any technical errors such as a broken printer. Therefore, businesses need a stable IT support that is dedicated in fully taking care of service provision in order to maintain the productivity of the people and eventually promoting growth of the business (Lichtenhaler, Hoegl and Muethel, 2011). Therefore, businesses require IT for the following reasons: staying productive, professional consultation and security.

Staying Productive

Trying to get solutions to operational issues often occurs as a serious setbacks for a business. Therefore, IT support is needed by experts to ensure that your computers are functioning at their highest efficiency (Laundon and Laoundon, 2012). This will ensure that individuals continue with their work without any interruptions therefore, the business needs not to worry about a decrease in productivity whenever something does break. For instance, Amazon has implemented Information Technology in its operations by developing a website that creates a platform where customers can choose a commodity and purchase it online encouraging business growth.

Professional Consultation

Businesses which spend substantial amount of funds in offering IT support often get consultation from IT experts in this particular field and are probable to prosper than those that don’t and for this exact reason, many businesses ought to heavily invest in IT support (Matos, Afsarmanesh and Rabelo, 2001). Companies require to provide IT support for computer software, hardware as well as current innovations such as VoIP phone systems which are very challenging to understand except if you’re an established IT technician or consultant. Offering adequate IT consultation helps businesses maintain the needs of the client and eventually helps with the growth of the business. Therefore, businesses need to keep up with technology so as to get better consultation services from the professionals (Lee, 2014).


Security is considered one of the biggest problems facing various businesses nowadays. Therefore, many businesses heavily invest in IT support in order to protect their systems from threats for example from hackers (Laudon and Laudon, 2012). These security threats occur due to either lack of information about the current threat or even due to the cost of protecting their systems which are considered very expensive. Therefore, IT support is very significant for it offers automated hacking programs which protects any business information. Being advanced with various security measures ought to be a major priority regardless of the business size. Therefore, for business owners, IT is a necessity it one wants to maintain their productivity and growth within the business (Chesbrough and Rosenbloom, 2002).

Importance of IT in Business

The success of all business rely on various sectors. Some tend to be accurate analysis which involves choosing the correct technology as well as the future vision. Information Technology is the sole technology which offers the opportunity to evaluate particular data as well as the business plan accordingly (Alexy and Reitzig, 2012). In this current times, digital marketing is one of the greatest tool that promote a products and service within a business. The importance of IT in business is that it encourages decision making, marketing and business growth and customer support and satisfaction (Alexy and Reitzig, 2012).

Decision Making

Speed and accuracy are the core of aspects of making proper decisions in a business environment. All successful businesses ought to conduct research of the comprehensive markets which allows management make the right decisions (Booth, Roberts and Sikes, 2011). Therefore, IT tools such as Google Analytics and Microsoft CRM Dynamics to mention a few are online platforms which offer real time feedbacks from the potential consumers thus assuring data accuracy minimizing risks of human error occurrence (Laudon and Laudon, 2012).

Marketing and Business Growth

The core of business success depends on its marketing strategies which allows its management recognize its key audience thereafter note their trends and needs. Overall marketing addresses public relation, promotions and sales which affects the growth of businesses (Jaruzelski, Loehr and Holman, 2012). Thus, IT provides services such as digital marketing which enables businesses promote both their products and services globally. Digital marketing involves concepts such as discussions, blogging, emails, forums and social media marketing to name a few. Therefore. IT has enabled the quick growth of business since entrepreneurs have recognized that digital presence on the internet results to the long-term success of the business (Alexy and Reitzig, 2012). For example, Alibaba has implemented Alipay which is a credit instrument that reduces the risk of e-transaction which has led to its growth. This IT instrument has enabled the company boost its competitive advantage.

Customer Support and Satisfaction

Higher degrees of customer satisfaction is fundamental to success of a business and thus cannot be attained without a real time consumer support operation (Mahadavan, 2000). The success of any business is dependent on the knowledge of their customer needs. Therefore, with the presence of an IT support, many channels of communication are provided between the business and its customers through platforms such as online newsletters, multimedia messages and social media to mention just a few (Timmers, 2001).

Requirements of IT in Business

IT and business go hand in hand with each other since they are codependent to each other. The requirement includes: costing, planning, equipment and installation to name a few. Cost is the most important consideration when looking at applying IT into business (Timmer, 2009). The cost of acquiring the specific software and hardware comes into place. In addition, the cost of training individuals also is an important consideration. Furthermore, planning is also another consideration since before introducing IT into a business, one has to identify its application and what benefits it would bring to the business. Also, installation is also a requirement since it is directly related to its cost. Installation of the IT equipment is a requirement in a business since either software or hardware has to be installed by an IT technician who has the expertise in such IT equipment (Ryssel, Ritter & Gemünden, 2004). For instance, ANZ has been obligated to employ digital marketing to its operations, which offers the banks a competitive edge to be ahead in the banking industry.

Application of IT in Business

A few decades ago, there was no email, telecommuting, and even the internet. Nowadays, communication is prompt and thus a large amount of information flow via emails and the internet and are in the hands of both the employers and the employees (Teece, 2007). Therefore, innovation in technology has enhanced processes of businesses of every size can be help it in its globalization. Technology can be used in business in the following ways: Communication, marketing, productivity, customer service and telecommuting.


IT has played a major role in its application in business by enabling communication through the use of cell phones and other technological devices. These devices are a lifeline of keeping in touch through responding to the queries raised by customers. IT has thus increased the accessibility to information through emails and also through social networking (Shirky, 2008).


Information Technology has increased the ranges of businesses when it comes to reaching new as well as existing customers. For instance, internet marketing has been made possible through websites, advertising and online product sales (Shirky, 2008). In addition, email marketing has been made possible for businesses by reaching a huge amount of people newsletters and business updates. Furthermore, mobile marketing is also helps businesses reach individuals via text messaging as well as advertising via mobile applications. This has helped businesses spread their messages effectively and also to a large number of customers (Chesbrough and Rosenbloom, 2002). For instance, Coca-Cola has used marketing as their chief strategy through advertising. They have well utilized advertising such as “taste the feeling” advert in order to promote their brand.


The utilization of IT in business activities has helped them in ensuring that productivity is attained at all costs. For instance, through printing out of marketing materials to activities such as offering customer service via online chats (Timmers, 2001). This enhances the focus of employees when utilizing technology appropriately with an intent of saving time. Therefore, providing employees with the proper hardware and software maintains their working efficiency always at their peak (Timmers, 2001).

Customer Service

Information Technology often brings closer to their consumers. IT offers platforms such as emails where the business representatives may communicate with their consumers. In addition, businesses equip themselves with call centres that ensures that their customer services have top-notch phone equipment which improves their efficiency (Mahadavan, 2000).


Businesses can use IT through telecommuting which involves staying in touch from various locations through online collaboration tools and other computing devices (Booth, Roberts and Sikes, 2011). In addition, workers can share digital documents through presentations as well as through creating training videos that bring staff members up to speed.

Benefits of IT in Business

Information Technology benefits business by permitting institutions to function efficiently as well as maximize their productivity. Quick communication and protection of information are examples of the benefits IT brings to business (Jaruzelski, Loehr and Holman, 2012). The advantages brought about by IT includes: storing and protecting information, automated processes and communication to name a few.

Storing and Protecting Information

IT produces electronic storages which can be used to store important business records. Secure maintenance of a client’s records is very important to the integrity of the business. Therefore, IT can allow a business store its vital records allowing restricted access to the information by those that have the privilege. IT security engineering systems secure every information from risks such as hacking or even during a technological disaster.

Automated Processes

In any business activity, individuals most at times intend to use the least amount of time to handle a huge amount of work (Shirky, 2008). IT therefore enhances the efficiency of a business through automation of most of their operations, releasing much pressure off their staff. Employees therefore can work on other processes as the computer runs the automated operations.

Effective Communication

In a business world, communication is very essential. Therefore, IT is advantageous since it gives business the resources it requires in order to communicate faster and more efficiently (Teece, 2007). Therefore, equipping a business with IT support can help it conduct business and communicate in a more efficient way. For instance, Amazon has encouraged communication of their services through social media such as Facebook and Twitter. Amazon has invested in social media in order to promote their marketing strategies.

Risks of IT in Business

With the introduction of IT to the business industry, it has also brought about the occurrence of risks to the business. These risks include: exposure to hackers, loss of data and risks caused by falling behind.

Exposure to Hackers

Introducing IT to a business may expose the business to various types of hackers. This is done to access vital business records through malicious technological innovations (Lee, 2014). Therefore, when introducing IT to a business, one has to be careful and ensure that security measures are put in place to handle such malicious attempts so as to secure important information. For instance, Facebook accounts have been constantly hacked numerous times. Therefore Facebook has improved their security measures to curb such challenges by conducting periodic maintenance to their systems.

Loss of Data

In addition, IT encourages the storage of vital information through applications such as clouds. This is a benefit as well as a risk to a business. If the records are not maintained carefully, they may be lost and it may distort the smooth flow of business (Lee, 2014). Therefore, when storing vital information, measures should be put in place to ensure that data recovery tools are available

Risks Caused by Falling Behind

Businesses failing to take advantage or readily available technology to enhance business performances, entry to markets as well as competitive position, with the result that they may lose ground against their competitors as well as new entrants (Ryssel, Ritter & Gemünden, 2004).

How Business Monitors IT

Many businesses opt to introduce an IT department that takes care of any software updates as well as hardware (Amit and Zott, 2001). Security IT monitoring can be conducted through daily monitoring to ensure that intruders have no access to exploit any vulnerabilities. In addition, businesses should ensure that they have a virus/malware protection which will help protect the systems which is also automatically updated. In addition, restrictions to unauthorized access should be quickly adopted by businesses (Amit and Zott, 2001). This will ensure that illegal access is negated completely securing the business from loss of records. Facebook has constantly monitored their IT putting a security support mechanism that can control the accessibility measures of its customers.


To sum up, technology plays a huge role in the business industry since it allows enhancement of business in terms of growth and performance. IT is required in business since it keeps the business productive, provides professional consultation as well as provide security for the business. In addition, IT is important to a business because it helps in decision making, marketing and business growth and customer support and satisfaction. Furthermore, IT can be applied in business for communication, marketing, productivity, customer service and telecommuting. The benefits of IT in business are that it assists in storing and protecting information, automating processes, effective communication. Companies such as Facebook, Amazon, ANZ, Alibaba and Coca-Cola have used IT to promote their services as well as their products.


Alexy, O & Reitzig, M 2012, ‘Managing the business risks of open innovation’, McKinsey Quarterly, January 2012, pp. 1–5.

Amit, R and Zott, C 2001, “Value creation in e-business,” Strategic Management Journal, vol. 22, pp. 493-520.

Booth, A., Roberts, R & Sikes, J 2011, ‘How strong is your IT strategy?’, McKinsey on Business Technology, Number 23, Summer 2011, pp. 2–7.

Chesbrough, H and Rosenbloom, R 2002, “The role of the business model in capturing value from innovation: evidence from xerox corporation’s technology,” Industrial and Corporate Change, vol. 11, no. 3, pp. 529-555.

Jaruzelski, B., Loehr, J & Holman, R. 2012, ‘The global innovation 1000: Making ideas work’, Strategy+Business, iss. 69, Winter 2012, pp. 1–14.

Laudon, K.C & Laudon, J.P 2012, Management information systems: Managing the digital firm, 12th edn, Prentice Hall, London.

Lee, I 2014, Trends in e-business, e-services, and e-commerce: impact of technology on goods, services, and business transactions, Hershey, Business Science Reference.

Lichtenthaler, U., Hoegl, M & Muethel, M 2011, ‘Is your company ready for open innovation’, MIT Sloan Management Review, Magazine, Fall 2011 Issue, pp. 45–48

Mahadavan, B 2000, “Business models for Internet-based e-commerce,” California Management Review, 42(4), pp. 55–69.

Matos, L., Afsarmanesh, H & Rabelo, R 2001, E-business and virtual enterprises: managing business-to-business cooperation, Boston, MA., Kluwer Academic Publishers.

Roberts, R & Sikes, J 2011, ‘How IT is managing new demands: McKinsey Global Survey results’, McKinsey on Business Technology, Retrieved 25th May 2016 from

Ryssel, R., Ritter, T & Gemünden, H 2004, “The Impact of Information Technology Deployment on Trust, Commitment and Value Creation in Business Relationships,” Journal of Business and Industrial Marketing, 19(3), 197-207.

Shirky, C 2008, Here Comes Everybody: The Power of Organizing Without Organizations, Penguin, New York.

Teece, D 2007, “Explicating dynamic capabilities: the nature and microfoundations of (sustainable) enterprise performance,” Strategic Management Journal, vol. 28, no. 13, pp. 1319-1350.

Timmers, P 2001, Electronic Commerce: Strategies and models for Business to Business Trading, Wiley, London.