IMPACT OF INFORMATION TECHNOLOGY IN THE

INCREASED PRODUCTIVITY OF AN
ORGANISATION
ABSTRACT
Information Tech has revolutionized the style of business around the world.
Local businesses have become international due to a simple website.
Information Technology has helped businesses through advertisement. People
who check their email may suddenly have a pop up at their page ends with sales
up to 60% at any particular brand or store.
This paper is to explain the impact of information technology on the increased
working and the productivity of an organisation and also to explain that any
organisation can have a significant impact on organizational flexibility due to
the involvement of information technology in it. Information technology (IT)
contributes to increased productivity by
1) Changing the nature of organization boundaries, and the time when work
occurs.
2) Altering the nature of working style and pace of work done in any
organisation.
3) Helping firms to respond to changing market conditions and working
methodologies, and
4) Information technology also helps to increase the social interaction which
influences the business relationships contributing into the increased productivity
of any organisation.
But there are also certain aspects of technology which can decrease flexibility,
and there may be second-order impacts of flexibility that are not easily
predicted. The paper concludes that management should consider the use of
information technology to increase flexibility of the organisation which
ultimately helps in the increased productivity and suggests strategies for
implementing flexible systems which will contribute in the achievement of the
same.

INTRODUCTION
New technological development puts new demands on companies, or provides
new possibilities for developing or improving market activities as well as
products. One example of such technological development is the employment of
information technology among industrial companies doing business (DeeterSchmelz, 2002, Pires and Aisbett, 2003). There are many different information
technologies, hence also various possibilities for companies to use them as they
conduct their exchanges. Some solutions make it possible for users that are
geographically dispersed to share data bases and messages to be exchanged and
delivered instantly to a vast number of receivers. Using for example Electronic
Data Interchange (EDI) is a way of letting some information flows go entirely
via information technology, such as the ordering of products and information on
delivery, or for payment (Angeles and Nath, 2000). Having integrated EDI
(Electronic Data Exchange) increases efficiency and permits business
relationships to save time and reduce costs. The development of information
technology in business has occupied the attention of researchers in recent years
(Chatfield and Yetton, 2000, Leek et al., 2003, Vlosky and Smith, 1993, Wilson
and Vlosky, 1998).
One prevailing view on business in academic research is to study business
between companies is to study it as taking place in business relationships of
long term orientation. Such business relationships contain elements of business,
information and social elements and there are a number of studies imposing the
impact of information technology on those different elements (cf. Leek et al.,
2003, Pires and Aisbett, 2003, Reunis et al., 2005, Wu et al., 2003). While some
proclaim that information technology increases relationship efficiency other
researchers state the negative impact of information technology. The impact of
information technology on, for example, content of industrial exchange is
discussed by a number of researchers. (cf. Burgelman and Doz, 2001,
Mukhopadhyay and Kekre, 2002, Osmonbekow et al., 2002, Sharma et al,
2001). Research within this field on how information technology impacts on
different relationship dimensions is extensive, but the specific area on how
information technology impacts on social interaction of business relationships
and business development has received little attention. Following the demands
of research for new studies, this paper studies the use of information
technology in the setting of industrial business relationships and its impact on
increased productivity of business has received little attention and its impact on
the social dimension.

As business is conducted between two companies, people from them need to

meet in order to exchange information on everything involving the product,
strategy and the business. Over time the two parties get to know each other and
thus a social dimension develops in the business relationship, through the
interaction. It is suggested in this research paper that when information
technology is employed in a business relationship, it may change or replace
former ways of exchanging information and one aspect of such change could be
an effect on the social interaction. Social interaction involves the meeting
between people from the two companies doing business and so meetings are of
interest for the study of social interaction. The social dimension of business
relationships is in itself a vast area of research and so this paper put down the
studying one specific aspect and that is impact of IT on productivity . The topic
is the need for personal meetings in business relationships and how the need
changes when the level of use of information technology varies in business
relationships. As meetings are part of the information exchange it is plausible
the need for them would decrease or increase as information technology is used.

Information technology and systems are used by any organizations to perform

certain tasks. Some use Information Technology to provide the basic processing
of transactions, while others enable customers, distributors and suppliers to
interact with the organization and among themselves through various
communication channels of technology systems such as the internet.
The term -information technology systems in an organization, is composed of
four distinct parts which include: an organization, the information in an
organization, and the information technology and information technology
systems within an organization.
Below I have listed, some of the impacts of information technology in any
organization.

Flow of Information: Information is a key resource for all the

organizations to function efficiently. What information describes to the
workers of the organisation might be internal, external, objective or
subjective. External information describes the environment surrounding the
organization. Objective information describes something that is
known. Subjective information describes something that is currently
unknown. With information technology the flow of all these three types of
information is made simple buy use of centralized data centers where all this
data can be retrieved. Information in an organization can flow in four
direction and these include upward flow of information, downward flow of
information, outward flow of information and horizontal flow of information.

Transaction processing: Information technology simplifies the

transaction process of an organization. A transaction process system (TPS) is
a system that processes transactions that occur within an organization. At the
heart of every organization are IT systems whose main role is to
capture transaction information, create new information based on the
transaction information. Transaction Process System will update any
transaction process and store that information in a database, so any
concerned party in the organization can access that information via a
centralized information storage network of internet.

Decision support: A decision support system (DSS) is a highly flexible

and interactive IT system that is designed to support decision making when
the problem is not structured. A DSS works together with an artificial
intelligence system to help the worker create information through (OLAP)

online analytical process to facilitate decision making tasks that require

significant effort and analysis.

Workgroup support: Since information technology facilitates in the

creating an information sharing environment, workers can easily consult
each other across different department without any interruption. They can use
emails, text chatting services to inquire something related to a given task at
work. With work group support systems, group decision making becomes
easier.

Executive support: An executive information system (EIS) is an

interactive management information system (MIS) combined with decision
support systems and artificial intelligence for helping managers identify and
address problems and opportunities. An Executive Information System
always allows the mangers to view information from different prospective.
Yet it also facilitates the managers with the flexibility to easily create more
views to better understand the problem or opportunity at hand.

Data Management: With the help of database management software,

any organization stores all its relevant and important data on a database in a
particular format. This infrastructure can be designed according to its nature
that is whether it is internal or external. An internal centralized system can
only be accessed within the organization by the authenticated people while
an external centralized system allows data to be accessed outside the
organization using a remote (IP) internet protocol Address or a different
domain name which facilitates the external data accessibility. In this case,
employees or managers can use a companys website to securely access
companys data by use of password. This data is not exposed to the public
and search engines to maintain the security.
Communication: Information technology accounts in the development
of effective communication channel. Services like electronic mail make
communication within and outside the organization easy and fast. Now
days communication through electronic mail is a default communication
medium or say channel used by every organization. Communication is a
great tool in business development, with advanced communication
technology and tools , employees and managers can easily make
beneficial decisions in the organization which can add value to the
organization and contribute in the increased productivity of the same.

Advantages of Technology to Business:

Customer Relations. Technology affects the way companies

communicate and establish relations with their clients. In a fast moving and
business environment, it is vital for them to interact with clients regularly and
quickly to gain their trust and to obtain customer loyalty. With the use of
Internet and online social networks, firms interact with consumers and answer
all their queries about the product. Establishing effective communication with
customers not only creates rapport with them, but it also creates strong public
image. It allows business enterprises to reduce and to cut carbon dioxide
emissions.

Business Operations. With the use of technological innovations,

business owners and entrepreneur understand their cash flow better, how to
manage their storage costs well and enables you to save time and money.
Corporate Culture. Technology lets employees communicate and
interact with other employees in other countries. It establishes clique and
prevents social tensions from arising.
Security. Modern security equipment enables companies to protect their
financial data, confidential business information and decisions.
Research Opportunities. It provides a venue to conduct studies to keep
themselves ahead of competitors. It allows companies to virtually travel into
unknown markets.
Corporate Reports. With technology, business enterprises communicate
effectively with their branch offices to deliver quality financial and
operational reports.
Industrial Productivity. Through the use of business software programs
or software packages, it automated traditional manufacturing process, reduces
labour costs and enhances manufacturing productivity. It enables companies
to increase efficiency and production output.
Business mobility. Technological innovations improved companies'
sales, services, shorted lead time on receiving and delivering goods and
services. Enables them to penetrate multiple markets at least costs.
Research capacity. It enables them to conduct studies on various
companies to gain knowledge on the new trends in the market and way on
avoiding them.

Information technology (IT) is drastically changing the business styles.

Although organization cultures and business strategies shapes the use of
Information Technology in an organizations, more often the influence is
stronger than the other way round. Information Technology apparently affects
strategic options and creates opportunities and issues that managers need to
address in many aspects of their business. The following points outline some of
the key impacts of technology and the implications for management on:
Business strategy With the involvement of Information Technology the
collapsing time and distance, enabling E-Commerce or electronic
commerce.
Organization Structures Now any branch or office of any organization
can interact with each other through networking and virtual corporation a
reality. Team weaver is an example to the same.
Organization Culture Through electronic media and communication
channel the free flow of information has been made effective.
Management Processes Intervention of information technology in the
business has provided support to the management to find the solution to
the complex problem and has made easy the decision making process.
Working Methods With the involvement of IT in the business
environment it has revolutionaries the method of working by changing
the nature of professional and now managerial work.
The workplace IT has facilitated work from home and on the move.
Now through internet we can work while we are moving in cars,
travelling or chilling at home.

REFERECES
http://ijssst.info/Vol-02/No-2/Eatock-etal.pd
http://www.answers.com/Q/Impact_of_information_technology_on_business
http://find.rockettab.com/newsearch/index.php?
kwd=influence+of+information+technology+on+business&uid=aabcVAfkYFA
B4BFYYxNddlT71jeGL2zYvmPxFS4ZqBL8u6oOpDGAovN3OQ8nlpFfT2GG
PErABKyRjsW4ZL2I6UdzrEtB7zjoOARQzXXNKMdVoFnw5d4xNQdGrtk
http://www.impgroup.org/uploads/papers/6732.pdf