Information Technology and Business : October 2012

Role of Information Technology in Growth of Business

Information technology (IT) refers to the management and use of information using computer-based tools. It includes acquiring, processing, storing, and distributing information. Most commonly it is a term used to refer to business applications of computer technology, rather than scientific applications. The term is used broadly in business to refer to anything that ties into the use of computers.

Mostly businesses today create data that can be stored and processed on computers. In some cases the data must be input to computers using devices such as keyboards and scanners. In other cases the data might be created electronically and automatically stored in computers.

Small businesses generally need to purchase software packages, and may need to contract with IT businesses that provide services such as hosting, marketing web sites and maintaining networks. However, larger companies can consider having their own IT staffs to develop software, and otherwise handle IT needs in-house. For instance, businesses working with the federal government are likely to need to comply with requirements relating to making information accessible.

The constant upgrade in information technology, along with increasing global competition, is adding difficulty and hesitation of several orders of scale to the business and trade. One of the most widely discussed areas in recent business literature is that of new organizational network structures that hold survival and growth in an environment of growing complexity.

Effective implementation of information technology would decrease liability by reducing the cost of expected failures and increase flexibility by reducing the cost of adjustment. The businesses reaction to the environment remains to be the vital determinant for its effectiveness. The capabilities and flexibilities of computer-communication systems make them gradually more appropriate to businesses by being able to respond to any specific information or communication requirement.

Information Technology is having impact on all trade industries and businesses, in service as well as in manufacturing. It is affecting workers at all levels of organizations, from the executives to middle management and clerks. Information technology is increasingly becoming a basic factor of all types of technologies such as craft, engineering, routine, and non-routine.

The advances in Information Technology would result in remarkable decline in the costs of synchronization that would lead to new, concentrated business structures. It enables the business to respond to the new and urgent competitive forces by providing effective management of interdependence.

In the near future businesses would be facing a lack and a redundancy of information called information glut. To solve the information-glut companies will need to introduce methods for selective thinning out of information. Improvements in telecommunications will make it easier to control business units dispersed over different parts of the world. Advances in telecommunications, would result in increased distance-communication. Indirect communication would be preferred for well-structured information for routine, preprogrammed and decision processes.

What Is the Role of Information Technology?

Strictly speaking, Information Technology (IT) has been influencing society for thousands of years. Smoke signals, the abacus, writing, paper, pens and the printing press were all once considered the forefront of IT because those technologies were the latest and greatest in communication.

But today it is widely accepted that the forefront of IT lies in digital communications. As with all historical Information Technology developments, digital communication technology is revolutionary in terms of society, business, defence and culture.

But what is it about digital communications that sets it apart from all other previous technological advances? What is the role that this technology can play in modern society?

Firstly, IT acts as a facilitator. It is a medium that permits large volumes of information to be stored, processed or transferred at lightning speed. This means that there is more information at hand to make decisions, maintain relationships, monitor markets or follow movements.

The power of this notion should not be underestimated, it allows people to make decisions based on masses of up to date information. The military, educational institutions and large business have long understood the power of this notion but it has only been in the last ten years that mainstream society has also embraced the power of information for both social movements and small business.

Secondly, Information Technology is an enabler. Only a select minority of specialized companies in the world can claim that IT is their business. Most corporations and institutions use Information Technology to enable functions that drive their core business. This may include better communication between staff, suppliers or customers or it may include better asset management. Whatever the function, digital communication makes the storage, processing or transfer of information more efficient than ever before. But it is important to note that in essence it does not change core businesses, ideals, ethics or movements. It just enables them to function at a greater scale much more efficiently.

Lastly, Information Technology assumes the role of custodian. As data and information is amassed on just about any subject you care to imagine, massive stores of data are emerging ready to service any new requests. And therein lies the security paradox that modern Information Technology presents. One can argue that more available information makes our lives more efficient, safer and richer. Whilst the other argument is that the very same information that provides these benefits is also our achilles heal due to the security implications of unauthorized infiltration.

There is little doubt that the role of information technology is directed and constrained by the very technology that defines it. Today, that technology allows us to collect, manipulate and communicate masses of information. As a consequence, the role of IT revolves around improving the efficiency, capacity, speed or accuracy of any elements that can benefit from the functions that modern Information Technology systems provide.

The Details About Information Technology Strategy

Businesses today really need to know how to implement information technology into their business to keep up with the competition. There are many aspects to information technology, and unless a business does work specifically in this area, they may need to hire an IT manager who knows about the field. They can implement an information technology strategy that specifically suits the goals of a company.

The target of the strategy can be either the forms of technology being used or the people who are using it. There is a principle from a business expert that an IT strategy has to focus on the strategy by creating and measuring the value of the business from the perspective of the investment put into the emBusinesses today really need to know how to implement information technology into their business to keep up with the competition. There are many aspects to information technology, and unless a business does work specifically in this area, they may need to hire an IT manager who knows about the field. They can implement an information technology strategy that specifically suits the goals of a company.

There have been other methods of implementing a strategy. The following are a few examples. Some strategies have focused on the ability of a company to spend on IT. Another focus has been how employees of a company can use the technology to create value for the organization.

The best way to come up with at strategy is to have both groups in managerial positions from the business and IT departments come together to design a plan. This helps to see the goals of the business along with how the IT department can accomplish this.

There is a structure to the IT strategy which will be explained. There is an executive summary which includes the project objective and scope. There is an approach with methodology of engagement. This IT strategy is then related to how it will work within the business strategy. There is then a resource summary relating to staffing and budget of this project.

Further, there are internal capabilities which affect how much can be accomplished. There are portfolios noting what projects are occurring at the moment. It should note how much resources it is taking to complete a project, and it can note any strengths or weaknesses.

There are other levels including external forces outside of the company which might be influencing the progress of the project. Perhaps there are more advanced technologies coming out which can possibly be implemented. It is good to noted if there are any threats which can hinder the progress, and it is wise to note any milestones such as accomplishments or the meeting of set goals. These all fit into the steps of designing a strategy and seeing one in progress.

Strategy in information technology is very important because it is the organization of a plan to make the system work. It includes the work of both the business team and the IT team to work together to make the goal of the company succeed. There are steps within the plan which need to be monitored which is done mostly by the IT team. There are different ways to do it, and new strategy methods are continually coming out. It depends on the expertise of both teams to decide what strategy plan will be taken and implemented.ployment of IT.

Further, there are internal capabilities which affect how much can be accomplished. There are portfolios noting what projects are occurring at the moment. It should note now much resources it is taking to complete a project, and it can note any strengths or weaknesses.

Data Arteries - Enabling Business Strategy Through Information Technology

Regardless of size and industry, every enterprise is dependent upon information technology, and must have a strategy for how to employ it, especially as the internet becomes more pervasive. Information technology strategy is an enabler of business strategy. Not only must an enterprise manage relationships with its constituencies, but it must be able to connect with them electronically through data arteries - information supply, value, and demand chains. The information supply and demand chains are external; the information value chains are internal.

An information technology strategy is a special case functional strategy because every function in the enterprise requires electronic information delivery capabilities, and many require electronic process control also. In very large enterprises, strategy may be formulated at both the enterprise and organizational unit levels.

As websites such as Facebook, LinkedIn, MySpace, Plaxo, and Twitter become more pervasive in business, linkages between application systems and databases and social networking websites will be more important to enable constituencies to communicate both collaboratively and cooperatively. Just as email has become a primary method of communication between enterprises and their constituencies, so will social networking sites especially for advertising and ecommerce.

Business intelligence information can be used to identify opportunities for competitive advantage. However, information technology itself can be an enabler of competitive advantage, especially when there are opportunities to digitize products or deliver information products electronically. In such cases, business strategy is inseparable from information technology strategy.

Information technology comprises the analytical and operational application systems, databases, and technical infrastructure (hardware and networks) of an enterprise. Not all computer technologies are information based. Computer technology is used for process control applications in special purpose equipment. However, connectivity is essential as applications become more integrated. As digital construction and manufacturing practices develop through such technologies as computer-aided design/computer-aided manufacturing (CAD/CAM), the processes, the control of processes, and the products and/or services delivered by processes all rely upon information technology for connectivity.

For example, in the manufacturing industry, not only can design and manufacturing work be conducted through integrated CAD/CAM processes with electronic linkages to carriers, such as FedEx and UPS, but the entire project and process management activities can be monitored electronically from ideation to product delivery.

Through technologies such as electronic data interchange and electronic funds transfer, data and both digital and information products flow through information supply and demand chains in parallel to material supply and product and/or service demand chains. Within the enterprise, data flows through information value chains from supply chains and to demand chains.

Developing an information technology strategy document is essential for describing the requirements and for educating users because:

The impact is enterprise or organizational unit wide and other elements of strategy cannot be implemented without it
Administrative activities, such as legal, finance, and human resources, and operational activities, such as research and development, procurement, manufacturing or equivalent, distribution, marketing, sales, and service depend on information technology - analytical and operational systems support both administrative and operational functions
The time frames, expenditures, risks, and magnitude of efforts are usually larger and more complicated than other initiatives and must be clearly understood; information technology projects have a tendency to go out of control and under deliver - therefore, contingency plans are always necessary
The subject matter can be complicated if not well explained

Information technology strategy is usually packaged as a separate but related document to the strategic plan. It is deployed and executed through specific programs and projects that develop new or enhance or maintain existing application systems, databases, and technical infrastructure.

Large information technology development projects are usually cross-functional, and may be part of a broader initiative sponsored by multiple functions collectively. Broader initiatives that have information technology components include:

Market research and development
Product research and development
Infrastructure research and development for processes and information delivery

For example - for the development of a:

Digital manufacturing system integrating both research and development and sales and production activities (sponsors: Manufacturing and Sales functions - impact is on Research and Development, Procurement, Manufacturing, Distribution, Sales, and Service functions)
Financial, managerial, and regulatory accounting and reporting system (sponsor: Finance function - impact is enterprise wide)
Human resource management system (sponsor: Human Resources function - impact is enterprise wide)
Sales tracking system (sponsor: Sales function - impact is on all salespeople enterprise wide)

Some projects can be solely for the Information Technology function, in which case it is a customer of itself.

Steering committees should be established for major programs and projects representing the various impacted functions in order to resolve cross-functional barriers. Major programs should come under the review of a planning and policy committee at the enterprise level.

Information technology strategy formulation is a project in its own right at the enterprise or organizational unit level. Very large projects are grouped as a program of inter-related components under a program manager. Projects can be stand alone also. A single project can deliver one or more application systems and related databases and technical infrastructure, or multiple projects may be required depending upon complexity.

For example, when launching a new product, it may be necessary to conduct marketing, product, and infrastructure development projects that include the delivery of new systems, and upgrades to existing systems. However, if an addition to the product line is launched at a later time, a new project or set of projects may be required to enhance or maintain the current systems, or even develop new ones.

The work breakdown structure for downstream development, enhancement, and maintenance projects decomposes into planning, analysis, design, construction, implementation, and performance measurement phases. The performance measurement phase can be conducted in parallel with the other phases, and each must end with a performance review. A feedback loop to future planning activities must be established so that lessons learned from the past can be reflected in future initiatives.

Meeting the cost and schedule requirements is always a major consideration. Hence, "meeting the date" is a frequent requirement for project success. However, after implementation, the scope of what was delivered and its quality is usually remembered more than when. In anticipation of the need to make changes after implementation, an adaption project may be necessary to tune, standardize, and integrate the deliverables.

The planning phase is conducted at the enterprise, organizational unit, or program levels for one or more projects depending upon size and complexity. However, each application system and related databases and technical infrastructure is delivered through a project with distinct analysis, design, construction, and implementation phases. Each phase always begins with a detailed planning activity to ensure that resources are allocated appropriately. The work breakdown structure does not preclude the use of iterative methodologies within each phase for rapid application development and prototyping. Development, enhancement, and maintenance of websites can be very rapid, and heavily interactive with user involvement, when the appropriate tools are used.

Key questions and deliverables by information technology strategy project and downstream phases include:

Strategy project (enterprise and organizational unit levels):

Key questions:

How does information technology enable business strategy?
What are the investment priorities?

Deliverables include:

Information technology architecture (applications, data and databases, and technical infrastructure)
High level project phasing and plans

Planning phase (enterprise, organizational unit, and program levels):

Key questions:

What are the administrative functions' systems and information needs?
What are the operational functions' systems and information needs?
What are the priorities for the candidate analytical systems?
What are the priorities for the candidate operational systems?

Deliverables include:

Process models
Function models
Data models
Information models
Economic evaluation
Scope of analysis projects and schedules

Analysis phase (project level):

Key questions:

How do processes, functions, and systems fit together?
How do systems processes and functions relate to enterprise processes and functions?
How do systems processes and functions and enterprise processes and functions fit together?

Deliverables include:

Functional requirements
Economic evaluation
Scope of design projects and schedules

Design phase (project level):

Key questions (by system):

What are the system's functional requirements?
What are the system's technical requirements?
What is the total cost of ownership and benefits (tangible and intangible)?

Deliverables include (by system):

Application system specifications
Data and database specifications
Technical infrastructure specifications
Scope of construction project and schedule
Total cost of ownership/benefit analysis

Construction phase (project level):

Key questions (by system):

Is the system being constructed according to design?
If not, what change orders are required, and why?

Deliverables include (by system):

Tested application system and interfaces, databases, and technical infrastructure
Trained users

Implementation phase (project level):

Key questions (by system):

What are the costs and schedule relative to plan?
What is the scope relative to plan?
What is the quality relative to plan
When will the benefits be realized relative to plan?
What adjustments for tuning, standardization, and integration are required relative to plan?
What are the current anticipated enhancement requests?
What are the current anticipated maintenance requests?
What are the lessons learned for the future?

Deliverables include (by system):

Working application system and interfaces, databases, and technical infrastructure
List of enhancement requests
List of maintenance requests
Performance measurement report

As enterprises become more dependent upon the internet for connectivity with constituencies, it is essential to develop, enhance, and maintain the information technology strategy on an ongoing basis. The strategy must emphasize connectivity through the data arteries as digital and information products become more pervasive.

Formulating information technology strategy is an enterpriship (entrepreneurship, leadership, and management) competency.

Essence Of Information Technology Landscape In Business Organizations

Any manufacturing organization would ideally have its Vision and Mission to guide them through its future course.

But does the organization have an Information Technology vision in place. Some organization may question this need, they may feel that the organizational focus should be on its core competency and Information Technology just plays a role of an enabler. But on the contrary such organizations are in greater need of an Information Technology vision. The role of Information Technology is that of a business driver in today's competitive environment and not just an enabler.

Now lets analyse the need and essence of Information Technology Landscape for a business organization.

Consider an XYZ organization, which after half a decade of existence had entered a phase of business growth. Till date the role of Information Technology would have been that of a support system. My experience says that most of the organizations in such a scenario tend to focus on their core competency and grabbing more business opportunities, and almost no attention is given to the key role Information Technology can play.

Keeping in mind the type of competition and constraints the business organization faces, like for example high demand and need for rapid increase in manufacturing capabilities, need of sizeable investments to enter new markets or more focus for business tie ups, its apparently difficult to focus and believe that Information Technology can be a business driver. But the fact of the matter is, it really is. So the question is how can it be done?

The organization requirements can be divided majorly into functional requirements (very specific to the industry domain), routine transactional requirements, content management requirements, workflow requirements and Infrastructural requirements.

Now the organization has to have an Information Technology Landscape plan, based on its current and future business landscape.

There can be phase wise implementation of the Information Technology landscape plan. Start with covering the domain functionalities (R&D, F&D etc), the benefits would be evident in this case. Followed by transactional systems (like ERP) and then content management systems. The benefits of such systems will be realized over a period of time, ideally after the stabilization period.

For workflow systems, they have to be built at an enterprise level. These workflow systems are of critical importance to an organization. The effectiveness of above systems can be greatly hampered by an inefficient workflow system in place.

Information Technology infrastructure is an on going process in an Information Technology landscape implementation. Any effective technology solution would have to be right collaboration of business software applications and hardware infrastructure.

The most critical of all is to always have an Integration Route, which the Information Technology landscape implementation strategy would follow. This well planned Integration Route is required for a holistic Information Technology perspective.

Gradually as the Information Technology landscape builds up in the organization, there will corresponding benefits in terms of business process automation, business process management, and finally leading to effective knowledge management with in the organization. In such a scenario, the Information Technology acts as a business driver; there onwards Information Technology perspective will be part of any future organizational strategy in scaling business growth.

The Importance of Information Technology Training from a Management Perspective

Information technology training for IT managers and systems analysts may seem superfluous - these folks are usually well-learned in their areas of expertise. But, do they understand how a company's technology fits into the bigger picture from a business perspective? That's where management training becomes important. Every manager who plays a role in researching, selecting or implementing enterprise technology needs to have a firm grasp on the basics of emerging technologies, as well as how they serve a larger business purpose, to ensure that technology is being used to the company's best strategic advantage.

Stay Current on Revolutionary, Emerging Technology Applications

A program of continual information technology training is crucial to the success of any IT team. Technology is constantly evolving, and it seems that there is a new application released every day that is meant to simplify doing business. This can be overwhelming if you do not stay current on the high-level trends of technology and their corresponding impact on business. With the Web 2.0 revolution in full swing, management training is a useful tool for managers to become familiar with the online trends such as blogs, wikis, podcasts and RSS feeds, as well as how the trends are going to change the ways we view the Internet and communicate with each other. It is estimated that these technologies will have significant business impact in the coming years, and companies everywhere have to consider directly how it affects their business strategies.

Information technology training can help managers determine the impact of new technologies and how to adapt their business processes. Trying to envision how Web 2.0 changes traditional business models is difficult when you have no knowledge of how these new technical applications are being used from a business perspective. First and foremost, managers must take it upon themselves to become proactive by keeping abreast of emerging trends and understanding them not only from a technical standpoint, but evaluating them from a higher-level, strategic standpoint. Management training courses on technology focus specifically on the ways that emerging technologies affect businesses on a high level. This is the type of knowledge needed to make conscious and informed decisions on what aspects of new technologies will affect your organization in the next few years and transition your thoughts into strategic action and implementation.

Collaboration and information sharing, within and outside of enterprises, are two areas that have made huge strides that management training can help your organization harness to improve business strategies. The advent of user-created content sharing has transformed the way that enterprises communicate. Enterprise-class blogs and wikis boost productivity and innovation by enabling ad hoc teams to participate in complex, collaborative problem solving, and then make the results available to the rest of the organization with ease. Information technology training gives managers the high-level information about these technologies that they need to bring them effectively into your organization.

Large companies will often struggle the most with adopting new business strategies based on emerging technologies due to organizational inertia and the lag that comes from changing any integrated system. Not only do the right people need to be convinced of the value of a new application, but the proper infrastructure often needs to be developed or tweaked to implement the technology. This is where the importance of management information technology training to understand the potential impact of technology from a business perspective comes into play.

Management Training for Appropriate Technology Selection and Recommendation

Management training courses typically deal with logistics and personnel management but fail to guide managers when it comes to making decisions about technology. As a manager in today's world, what really matters isn't just your ability to lead and maintain technology infrastructure - it's your ability to deliver positive business outcomes. Cutting IT costs and managing infrastructure are only part of the equation. Technology must also reduce business risk and generate new opportunities and growth. Information technology training can help managers transition their views of technology as an isolated island off the coast of a business and look at it as one working part of the whole machine that is the organization.

Finding a cool application that has all the shiny bells and whistles you dreamed of and recommending implementation based on the technology's sheer innovation is no longer enough to make a good business case. Before presenting a recommendation, you must understand every step involved with the successful implementation of the technology. A thorough study will need to be conducted to determine what departments, processes and functions will need to be modified in order to benefit from the new technology. Management training courses focusing on information technology gives managers the tools they need to make that determination.

If you are going to make an impact on the decision makers of a business, you have to get on their level. When it comes down to making a decision, for many business people it is all about the numbers. That is why it is essential to participate in information technology training courses that help you perform your due diligence and gather the data you need to compile hard numbers around your recommendation. What is the true return on investment that the company can expect to achieve by implementing the technology? It is much easier to convince an associate of the merits of your idea if you can show a real increase in profit based on proven research instead of attempting to sway them based on opinion only.

Conclusion

Technology is rapidly changing the way that businesses communicate and function every day. It is important for managers to take a proactive role in understanding emerging technology trends and how they may affect a company's business model by investing in an ongoing program of information technology training for all levels of staff. Management training in particular is essential for ensuring the right technologies are pursued to ensure business success. Viewing technology as a direct influencer on the business as a whole ensures consistent alignment of goals throughout the enterprise.

Pointers for Impressive Information Technology Resumes

Famed as one of the fastest growing industries worldwide, numerous Information Technology businesses and services have recently emerged in the global commerce. However, there are actually too many Information Technology resumes submitted for a particular vacancy. With the increasing number of job applicants competing for the desirable job, how can you make yours stand out?

Appearance matters

The first thing that the hiring managers will notice in your resume is its appearance. Because they receive several job applications each day, keep in mind that it should create an impact within the first 15-20 seconds. Therefore, give importance to its presentation. Print it on a top quality bond paper. Use different font face and styles (like bold and italics) for the headings and subheadings. Make bullet points to make the copy easier to read. However, don't overuse these formatting tools or they will lose their impact. Also, don't shrink the margins or make the texts too condensed. Remember that it should have a clean and professional layout that could draw the eyes of your prospective employer.

Write a professional summary rather than an objective

Although it had once gained popularity, including an Objective section in your resume is considered outdated nowadays and could do more harm than good. Objective says, "This is what I want," rather than "This is what I have to offer." It seems to impose more of the applicant's needs instead of the employer's. Objective section has been replaced with a Summary section that tells about your qualifications and your expertise.

Include a section outlining your technical skills

The Technical Skills section is something that you may not see in application documents in other fields, but it is extremely crucial in Information Technology resumes. It includes the operating systems, hardware, software, and networking that you are knowledgeable of. Also, make sure to be specific and include the system versions for this section.

Highlight your accomplishments

Do not be too focused on your responsibilities from your past jobs. Prospective employers want to see accomplishments and what makes you exceptional from other job applicants. Accomplishments show how your work created an impact on the organization you had been previously a part of and how it could cause a similar effect to the job position you are applying for. Moreover, these also set you apart from other candidates and display your results.

Keep your resume up-to-date

It is advisable that you limit the details you will include in your resume within the last 10 years. Technology is a rapidly-changing trade, and what might be valuable in the past may not be significant in the present. The job responsibilities you performed more than 10 years ago might no longer be relevant nowadays.

Proofread your resume

Finally, go over your resume again once you have finished it and make sure that all of the pieces of information are accurate. It is important to check your grammar and spelling as well. Small things like typographical error could make your prospective employer doubt about your competency. It is because in the IT industry, one mistake could lead to enormous and multiple problems. Thus, make sure that it is accurate and error-free.

The resume is your first step in job application. You might be the most qualified applicant but if what you have is a sloppy-looking copy, you are lessening your chances for a possible employment. There are numerous types of Information Technology resumes that hiring managers and prospective employers encounter each day, and submitting a well-crafted one would certainly bring you on the top of the list for the interview.

Looking For New Income? Try Information Technology Consulting

A lot of good people can be involved in the world of information technology consulting. The outsourcing of these jobs is something that happens to be occurring more and more often. There are a lot of people out there who may think that an IT consultant is automatically going to make a lot of money, but this fact isn't necessarily always true. There are people out there who happen to be involved with the world of venture capital that happen to want to invest in things like information technology companies. There are a number of companies who simply cannot be involved with positive it support.

There are a lot of IT consulting offers that happen to be something which many people can find a lot of value in. You can focus on something like it relocation as a business owner. The business owner may simply want to deal with the relocation process in order to save money on overall labor costs. There are plenty of people who can grow with a certain level of confidence that the process of outsourcing work for their company can often lead to higher profits for them. You want to make sure that you are honest and transparent as a company owner if you are going to be involved with the outsourcing process. People need to be honest with the workers if they are going to go forward with the outsourcing of their jobs.

You can learn a lot by developing a good information technology business plan.

Training Six Sigma - Information Technology

Process improvement is vital in an information technology business. When there is a dozen staff members running around repairing computers, there has to be a process to the madness. If one customer issue arises that is easy for one employee to solve, but the same issue takes another employee 4 hours to troubleshoot, there is some sort of disconnect. This actually occurs all of the time with an information technology industry. Training Six Sigma to employees in IT will help with documenting fixes and repairs of hardware or software issues. This will allow for someone who doesn't know how to fix an issue to walk right up and perform the fix in a few minutes rather than a few hours. Process improvement can be learned and imprinted in the mind of employees when you send them to Six Sigma courses.

Quality support is very important with information technology also. Just because you are fixing a computer for someone that works for the same company doesn't mean they are not a customer. Internal employees are your customer if they are calling you for support. Training Six Sigma helps employees understand how to motivate staff across an organization and create a desire for IT personnel to provide quality support to everyone they help.

Quality begins with a clear understanding of what the customers needs really are. It also includes courteous behavior and working in a timely fashion. Customers rely on IT organizations to provide the best support possible because their job depends on it. Training employees in Six Sigma is the best thing a business can do with their IT staff. When they can ensure all equipment is up and running as it should be, everyone can do their jobs and there is no downtime.

The information technology industry can benefit from training Six Sigma to all staff members. This includes entry level positions, team leaders, and even management. Management might go to Six Sigma Black Belt training while entry level staff learns the basic methodologies. This is beneficial to a company because the IT staff will learn how to improve processes by documenting, how to provide total quality support, and meeting the customers needs. Six Sigma Training can ensure the success of business - even in the IT department.

What Information Technology Management is About

The world is very much dependent on information technology because this is where businesses can get all of their information to customers or other consumers. Information technology is the study, development, and implementation with support of information systems. Information technology management is another step forward which takes the technology as a corporate resource where a company can organize it into an important tool to get their information to all targets. It can be used to help with business to gain new customers or to keep people abreast of all new things happening in the company.

Businesses who employ it must be in close relations with IT management in order for their businesses can use it to its optimum effectiveness. Topics that need to be understood to make information technology work is strategic planning, financial management, and risk analysis.

With this area of expertise becoming so much more important in this world, people can study this area at length. There are bachelor, masters, and doctorate degrees. There are many colleges who offer these courses. There are even courses online that allow some people with current jobs to take an online course at home. It helps people to accomplish a goal without adjusting their lifestyle too much.

To more closely look at the role of an IT manager, they must know how to plan, design, select, and use the new technologies that are coming out to integrate into the business that is employing them. Therefore, it is the ability of a person to effectively use the systems available to make it work for a business.

There are many resources online to find out more about this topic. There are schools who can help people decide if this is the career path that they would like to take. Businesses can get information on IT consultants who can help improve their businesses with setting up their system, and implementing the most economical system with up-to-date software.

There are journals available on all of the latest topics. They have some of the best people in the field keep other managers informed of new technologies being tested.

There can be specialists in different businesses who need information technology. Technology is advancing in every field, and it may take more expertise to implement information technology in certain fields because each field has its own specified systems.

Information technology management is a necessary field as our society continues to grow. Information technology are a set of technological systems which groups or businesses employ in order to spread the information which they produce or in turn, collect. Businesses may not be information technology businesses and need the assistance of those who are experts in the field to implement it into their business. IT managers are these people, and they can help to study a business and build the network of a business with the most economical and up-to-date systems. To become an IT manager, one can go to college advisors to find out if this is the field for them. There are many programs across the country.

Information Technology in Today's Business Setup

Gone are the days when one had to send a letter, give it a week for delivery and patiently wait for another two weeks before getting a response. Taking an example of a business setup that has branches in other towns, a network of computers with internet access and other customized programs would ensure quick communication and timely responses to important queries.

At my first work place, I implemented an online payroll system which allowed users to view their pay slips at their convenience, search for old pay slips, submit their time cards and print only the details they needed. Earlier on, the same documents had to be printed, manually put into envelopes and dispatched to various branches via paid courier service. These then had to be manually sorted out at the recipient's end causing a delay and misplacement of some documents.

I have also seen the intranet working wonders in many organizations. If well managed, the intranet can hold all the information that the company would like to share its employees. Suppose the managing director wants to send a memo to the whole organization, instead of pinning the printed information on physical notice boards, he can post the same on the intranet and have all employees read the information at the click of a mouse.

Other kinds of information such as sales targets, company performance, appraisal targets, company's product information, telephone directory, photo gallery for various events and anything else that one would like to share can be posted on the intranet.

Information technology has for sure changed the way business is conducted and has enabled smooth business operations.

How to Establish a Budget and Buy New Information Technology

The traditional approach to purchasing technology may be stated as follows (with minor variations):

1. Create a budget

2. Create a requirements list

3. Review technology demonstrations

4. Get proposals from the technology providers

5. Buy from the lowest bidder if they meet the basic requirements

What's wrong with this picture? Let's drill deeper beginning with "Create a budget."

Typically the budget is predicated on what the organization thinks they want to spend on their new technology. This is precisely the wrong starting place. The enterprise ought first to determine what strategic and tactical benefits they want their new techology purchase to deliver. They should determine, in advance, how they expect their new investment in technology will help them increase throughput, reduce inventories and other investment demands, and hold the line or cut operating expenses. These goals should be quantified and they should be rational. For example, the organization might say:

INCREASING THROUGHPUT - Investment in CRM will help us segment our market in ways that will allow us to make more targeted win-win offers to our existing customer base while simultaneously giving us opportunity to make offers to new customers that will grow our market share. Combined, we expect these two effects to add $4 million in revenues over two years and an estimated $260,000 to net profits before taxes (NPBT).

REDUCING INVENTORIES/INVESTMENT DEMANDS - Investment in improved warehouse, inventory management, and inventory replenishment (supply chain) technologies will allow us to reduce overall inventories by an estimated $2.5 million over two years. By reducing inventories, this will relieve pressure on demands for new warehouse and production floor space. Thus, demands for new capital investments are also attenuated. The forecase $2.5 million reduction in inventories should save the enterprise an estimated $72,000 in carrying costs in year one and $136,000 in carrying costs in year two after go-live.

HOLDING THE LINE ON OPERATING EXPENSES - The improved accuracy and enterprise-wide data visibility provided by the new ERP (enterprise resource planning) system should reduce the requirements to add personnel as revenues increase. Our expected benefit would be 4.2 FTEs (full-time equivalents) over the coming two years at an average FTE cost of $78,000 per year for a total estimated benefit of $3.28 million over two years.

Summary of Net Estimated Benefits Over Two Years:

INCREASED THROUGHPUT $ 260,000

REDUCED INVENTORIES/INVESTMENTS $ 208,000

REDUCED OPERATING EXPENSES $3,280,000

TOTAL ESTIMATED BENEFIT (2 YEARS) $3,748,000

Having completed this kind of analysis, the organization has now quantified what it hopes to gain from its investment in the new techologies. More than that, the management team is in a far better position to determine "requirements." The requirements list will no longer be the 300 or more mostly meaningless items garnered from current users that do little more than reiterated things like "Must be able to print a check." Instead, the team is ready to focus on that relatively small handful of things that a technology provider might show them that will really help them achieve the enterprise's goals for meaningful improvement. Equally important, the management team is now prepared to set a meaningful budget based on realistic expectations and forecasts of return on investment (ROI).

SUMMARY

Business owners, executives, and managers that assume that buying information technology is best done by setting a budget, considering the options, and then buying from the lowest bidder are likely to be disappointed. This is especially true if their budget amounts to nothing more than a guess-timate of what they think their "new system" should cost. If they have not set strategic goals for their investment in new technologies, then their purchasing process will lack focus and it is all too likely that their acquired technology will not be fully integrated with their corporate strategies. Furthermore, using the traditional approach will mean that it is less likely -- not more likely -- that the new technology will not deliver the return on investment (ROI) that stakeholders wanted.

The Basics - How Information Technology and The Internet Has Changed How We Do Business

Introduction: If you're of a technical nature, you may be expecting to see words like TCP/IP, NAT, Spanning Tree Algrorithm, Subnet Masking, Edge Routers, and Cisco IOS. However, this brief article is not meant for you, it is a concise view of how communication technology has evolved the business sector in the US an across the world.

Information technology (IT), is defined as "the use of technologies from computing, electronics, and telecommunications to process and distribute information in digital and other forms" (ref: Encarta Dictionary.) Information Technology, particularly in telecommunications-based company applications, helps a corporation triumph over time, geographic, and cost constraints to build and sustain a successful business. These three tactical capabilities of telecommunications networks emphasizes how several e-business applications can help an organization capture and provide information quickly to end users at remote locations as a relatively cost effective solution, as well as supporting its strategic company objectives. Using telecommunications technology can bring together not only employees, customers, consultants, subcontractors, and suppliers, but hopefully new potential customers! Some details of the specific areas how communication technology brings value to a company and supports greater profitability:

Time Constraints-Eliminated: Provide requested information on a real-time basis to remote users (these can be internal company staff or existing, potential customers.) If you are using a Point-of-Sale operation, credit card approval without hesitation, thus getting closer to a paperless operation. International travel does not have to be in your plans, as this technology can replace these gatherings. You no longer have to spend unproductive hours in airports or suffer jetlag upon arrival/return.

Prohibitive Expenses- Removed: Minimize the cost to the corporation for long distance calls, international calling plans, or pay per use video conferencing sites. You may also find the need NOT to purchase that Video Conferencing Equipment and large conference table! Using more COTS communication techniques, utilizing the Internet, can be a very cost effective solution for many companies, vs. the cost of more traditional means of communication.

Geographic Constraints-Nonexistent: Present information about business transactions from remote locations. Use the Internet to receive customer orders from your sales staff around the world to a central company database. Merge this information into your order processing and/or inventory control application without human intervention. This approach provides enhanced customer service by eliminating additional delay in processing customer orders and reduces the time between shipment and invoicing, for improved cash flow. Using this technology can remove the need for costly business trips, or collaborative meetings with clients.

Strategic Capabilities e-Business Examples Business Value

The evolving trend in computing and telecommunications market is the volatile growth of the Internet.

The Internet has become the principal and most significant network identified to date, and has migrated into a global information superhighway. The Internet is continually intensifying, as more and more businesses and other organizations (and their users), computers, and networks join this global society. The interconnection of thousands of network routers, switches and other equipment provides the means for millions of computer systems and users around the globe can communicate to each other. These computers are owned by of business, universities, clients and joint business partners. The Internet has also become a key stage for a rapidly expanding list of information, services and business applications, including electronic-commerce systems supporting the public to purchase items directly from the vendor.

Websites offer information and support direct ordering systems for electronic commerce between businesses, their suppliers and consumers. E-commerce websites usually offer all the products and services of regular retailers. Many businesses have setup business-to-business transaction accounts to provide immediate confirmation of purchase orders or inform the buyer of the status of their order. The Internet also provides "discussion forums" formed by thousands of special-interest newsgroups. You can contribute in discussions or post messages on any of these topics for other users, to which they can read and respond. In addition, you can make online searches using search sites and search engines such as Google, Yahoo!, MSN, ASK, and others. To assist in relatively quick and timely communication medium, you can utilize "chat" software applications to communicate in real-time.

This is very effective in getting a quick question answered or providing information to someone in need. Business use of the Internet has expanded from into a large platform for deliberate business applications. Collaboration among business associates, providing customer and vendor support, and electronic business have become major industry uses of the Internet. Companies are also using Internet technologies for marketing, sales, and customer relationship management applications, as well as cross-functional business applications, and applications in engineering, manufacturing, human resources, and accounting Utilizing Commercial-Off-The-Shelf (COTS) software, or applications included in many Operating Systems (Linix, Windows, etc) the company engineers can now hold virtual meetings in which drawings can be viewed in real-time, on a virtual "whiteboard". Those attending can monitor, revise or comment on the drawings as the meeting unfolds. One example is the IBM implementation of "Sametime®", in which global meetings can be implemented using the Whiteboard approach. If the company finds value, they can involve their customers to also attend anywhere in the world. This collaborative effort can be priceless, as bringing experience from around the world may just save an error in design, or provide a cost improvement suggestion to bring down costs of the product or service.

Primary uses of the Internet's are:

Downloading: Transfer data, electronic files, software, reports, articles, information, drivers and applications to your local system.( Insure your computer is protected with virus and spam/malware protection software!)
Discussions: Participate in discussion forums or post messages on specialized forums created by thousands of special-interest groups.
Chat: Hold real-time text conversations in chat rooms with Internet users around the globe. Text orientated cell phones are now enabled to participate in this means of communication.
Surf: Navigate to hundreds of thousands of hyperlinked websites and assets for information, leisure, or electronic commerce.
E-Mail: Use e-mail to exchange electronic messages with other clients, customers or business partners. This has become the standard in timely communications between and within businesses.
Purchasing: You can purchase anything via e-commerce retailers, service providers, and other websites offering "shopping carts" and checkout applications.
Remote Access: Log on to your corporate computer system and resources. Utilizing a VPN (Virtual Private Networking) application is paramount to providing a secure medium through the Internet. This is valuable to insure your data is not intercepted or used by unauthorized users.
Video Conferencing: This is the most efficient means to communicate with other business partners or your corporate employees. Using a inexpensive webcam and free application software can make this a very cost effective means to interface with others.

Each year, companies develop other uses for the internet, which as replaced many older means of telecommunications. Gone are the old modems, dial-up circuits, and leased lines. VPN via the Internet has replaced many dedicated communication circuits, as Internet Service Providers (ISP's) have taken on a greater role. Service Level Agreements (SLA's) have become second nature where a company is guaranteed a predefined level of service (quality) relative to their data circuit operation. At this point in time, the Internet is evolving again, noted as Internet 2.0. Software as a Service (SaS) is becoming a new business model for developing business applications. SaS allows a company to use application software located on a separate computer across the Internet, to support their business. It is less costly than "buying" the software, as you only pay for the time it is being used. Also, having this as parts of your disaster recover and backup planning can also simplify your business processes.

In 1964 Gordon Moore, of Fairchild Semiconductor Corporation in the United States, predicted that the number of transistors that could be fabricated on a processor chip would double every year. Known as "Moore's law", this roughly holds true (actually about every two years). It is unknown where or how the Internet will eventually evolve. However, many of us have not known this medium until we joined the working force. Now our children are exposed to this in school, any many know more about its operation and usefulness than many adults. What will it look like to our grandchildren?

Information Technology: Foundation of Business

From simple word processing software to sophisticated encrypted database system, various types of businesses are relying on information technology to transact with clients and business partners. Significant portion of the transactions and wealth of many businesses are now in electronic or digital format. Hence, it is not surprising why big corporations invest significant amount of money on information technology.

Business infrastructure does not only refer to buildings and other concrete structures. It also refers to the main support systems of a business such as technological infrastructure. Unlike concrete and metal infrastructures, technological infrastructures need to change more frequently. This is in order to adapt to the rapidly changing economic environment. Business entities that are capable of fast technological adaptations are more capable of competing on the global scale.

Information technology is crucial to business infrastructure. It can be considered as the nervous system of business. This is particularly true for large corporate businesses that have many branches and varied operations. A fast food business, for instance, rely on the supply logistics of mass-produced ingredients such as burger patties. The efficiency of fast food logistics is dependent on how the individual restaurant branches communicate with the inventory chain. All of these are possible because of computer the networks and databases that are updated in real time.

Information is both a commodity when it comes to business operations. It is a commodity because business entities purchase it in the form of software applications. Information also corresponds to the inventory or stocks of products. For some businesses such as online businesses, information is a commodity that they buy in the form of high traffic keywords. From smart phone software applications to database of prospective clients, information is a commodity that has a wide range of value depending on the practical use.

On the other hand, information is also a currency in literal and indirect sense. Bank accounts, transaction revenues, balance sheets, and other information mostly have electronic counterparts. Majority of these actually exist as purely encrypted information in some computer networks. The simple payment of fares in commuter trains, for example, can now be conveniently done using a smart phone. Utility bill payments can also now be done online through secured servers of banks. Of course, shopping can also be done through the internet. All of these involve the transfer and recording of information in the form of electronic money.

Businesses that have advanced IT systems are likely to be more competitive globally. Paper-less and cash-less transactions are now becoming a norm of global trade.

Healthcare Information Technology - Business Valuation

One of the most challenging aspects of selling a healthcare information technology company is coming up with a business valuation. Sometimes the valuations provided by the market (translation - a completed transaction) defy all logic. In other industry segments there are some pretty handy rules of thumb for valuation metrics. In one industry it may be 1 X Revenue, in another it could be 7.5 X EBITDA.

Since it is critical to our business to help our healthcare information technology clients maximize their business selling price, I have given this considerable thought. Why are some of these software company valuations so high? It is because of the profitability leverage of technology. A simple example is what is Microsoft's incremental cost to produce the next copy of Office Professional? It is probably $1.20 for three CD's and 80 cents for packaging. Let's say the license cost is $400. The gross margin is north of 99%. That does not happen in manufacturing or services or retail or most other industries.

One problem in selling a small healthcare technology company is that they do not have any of the brand name, distribution, or standards leverage that the big companies possess. So, on their own, they cannot create this profitability leverage. The acquiring company, however, does not want to compensate the small seller for the post acquisition results that are directly attributable to the buyer's market presence. This is what we refer to as the valuation gap.

What we attempt to do is to help the buyer justify paying a much higher price than a pre-acquisition financial valuation of the target company. In other words, we want to get strategic value for our seller. Below are the factors that we use in our analysis:

1. Cost for the buyer to write the code internally - Many years ago, Barry Boehm, in his book, Software Engineering Economics, developed a constructive cost model for projecting the programming costs for writing computer code. He called it the COCOMO model. It was quite detailed and complex, but I have boiled it down and simplified it for our purposes. We have the advantage of estimating the "projects" retrospectively because we already know the number of lines of code comprising our client's products. In general terms he projected that it takes 3.6 person months to write one thousand SLOC (source lines of code). So if you looked at a senior software engineer at a $70,000 fully loaded compensation package writing a program with 15,000 SLOC, your calculation is as follows - 15 X 3.6 = 54 person months X $5,800 per month = $313,200 divided by 15,000 = $20.88/SLOC.

Before you guys with 1,000,000 million lines of code get too excited about your $20.88 million business value, there are several caveats. Unfortunately the market does not care and will not pay for what it cost you to develop your product. Secondly, this information is designed to help us understand what it might cost the buyer to develop it internally so that he starts his own build versus buy analysis. Thirdly, we have to apply discounts to this analysis if the software is three generations old legacy code, for example. In that case, it is discounted by 90%. You are no longer a technology sale with high profitability leverage. They are essentially acquiring your customer base and the valuation will not be that exciting.

If, however, your application is a brand new application that has legs, start sizing your yacht. Examples of this might be a click fraud application, Pay Pal, or Internet Telephony. The second high value platform would be where your software technology "leap frogs" a popular legacy application. An example of this is when we sold a company that had completely rewritten their legacy management platform in Microsoft.Net. They leap frogged the dominant player in that space that was supporting multiple second generation solutions. Our client became a compelling strategic acquisition. Fast forward one year and I hear the acquirer is selling one of these $100,000 systems per week. Now that's leverage!

2. Most acquirers could write the code themselves, but we suggest they analyze the cost of their time to market delay. Believe me, with first mover advantage from a competitor or, worse, customer defections, there is a very real cost of not having your product today. We were able to convince one buyer that they would be able to justify our seller's entire purchase price based on the number of client defections their acquisition would prevent. As it turned out, the buyer had a huge install base and through multiple prior acquisitions was maintaining six disparate software platforms to deliver essentially the same functionality.

This was very expensive to maintain and they passed those costs on to their disgruntled install base. The buyer had been promising upgrades for a few years, but nothing was delivered. Customers were beginning to sign on with their major competitor. Our pitch to the buyer was to make this acquisition, demonstrate to your client base that you are really providing an upgrade path and give notice of support withdrawal for 4 or 5 of the other platforms. The acquisition was completed and, even though their customers that were contemplating leaving did not immediately upgrade, they did not defect either. Apparently the devil that you know is better than the devil you don't in the world of healthcare information technology.

3. Another arrow in our valuation driving quiver for our sellers is we restate historical financials using the pricing power of the brand name acquirer. We had one client that was a small healthcare IT company that had developed a fine piece of software that compared favorably with a large, publicly traded company's solution. Our product had the same functionality, ease of use, and open systems platform, but there was one very important difference. The end-user customer's perception of risk was far greater with the little IT company that could be "out of business tomorrow." We were literally able to double the financial performance of our client on paper and present a compelling argument to the big company buyer that those economics would be immediately available to him post acquisition. It certainly was not GAP Accounting, but it was effective as a tool to drive transaction value.

4. Financials are important so we have to acknowledge this aspect of buyer valuation as well. We generally like to build in a baseline value (before we start adding the strategic value components) of 2 X contractually recurring revenue during the current year. So, for example, if the company has monthly maintenance contracts of $100,000 times 12 months = $1.2 million X 2 = $2.4 million as a baseline company value component. Another component we add is for any contracts that extend beyond one year. We take an estimate of the gross margin produced in the firm contract years beyond year one and assign a 5 X multiple to that and discount it to present value.

Let's use an example where they had 4 years remaining on a services contract and the last 3 years were $200,000 per year in revenue with approximately 50% gross margin. We would take the final tree years of $100,000 annual gross margin and present value it at a 5% discount rate resulting in $265,616. This would be added to the earlier 2 X recurring year 1 revenue from above. Again, this financial analysis is to establish a baseline, before we pile on the strategic value components.

5. We try to assign values for miscellaneous assets that the seller is providing to the buyer. Don't overlook the strategic value of Blue Chip Accounts. Those accounts become a platform for the buyer's entire product suite being sold post acquisition into an "installed account." It is far easier to sell add-on applications and products into an existing account than it is to open up that new account. These strategic accounts can have huge value to a buyer.

6. Finally, we use a customer acquisition cost model to drive value in the eyes of a potential buyer. Let's say that your sales person at 100% of Quota earns total salary and commissions of $125,000 and sells 5 net new accounts. That would mean that your base customer acquisition cost per account was $25,000. Add a 20% company overhead for the 85 accounts, for example, and the company value, using this methodology would be $2,550,000.

7. Our final valuation component is what we call the defensive factor. This is very real in the healthcare information technology arena. What is the value to a large firm of preventing his competitor from acquiring your technology and improving their competitive position in the marketplace. One of our clients had an outcomes database and nurse staffing software algorithm. The owner was the recognized expert in this area and had industry credibility. This was a small add on application to two large industry players' integrated hospital applications suite. This module was viewed as providing a slight features advantage to the company that could integrate it with their main systems. The selling price for one of these major software systems to a hospital chain was often more than $50 million. The value paid for our client was determined, not by the financial performance of our client, but by the competitive edge they could provide post acquisition. Our client did very well on her company sale.

After reading this you may be saying to yourself, come on, this is a little far fetched. These components do have real value, but that value is open to a broad interpretation by the marketplace. We are attempting to assign metrics to a very subjective set of components. The buyers are smart, and experienced in the M&A process and quite frankly, they try to deflect these artistic approaches to driving up their financial outlay. The best leverage point we have is that those buyers know that we are presenting the same analysis to their competitors and they don't know which component or components of value that we have presented will resonate with their competition. In the final analysis, we are just trying to provide the buyers some reasonable explanation for their board of directors to justify paying 8 X revenues for an acquisition.

Information Technology: Foundation of Business

Hardly any business today is independent from using information technology. The technological innovations in computer hardware, software applications, internet and wireless connectivity led to business efficiency. Various types of business entities became largely dependent on these technological operations for their day-to-day operations.

From simple word processing software to sophisticated encrypted database system, various types of businesses are relying on information technology to transact with clients and business partners. Significant portion of the transactions and wealth of many businesses are now in electronic or digital format. Hence, it is not surprising why big corporations invest significant amount of money on information technology.

Business infrastructure does not only refer to buildings and other concrete structures. It also refers to the main support systems of a business such as technological infrastructure. Unlike concrete and metal infrastructures, technological infrastructures need to change more frequently. This is in order to adapt to the rapidly changing economic environment. Business entities that are capable of fast technological adaptations are more capable of competing on the global scale.

Information technology is crucial to business infrastructure. It can be considered as the nervous system of business. This is particularly true for large corporate businesses that have many branches and varied operations. A fast food business, for instance, rely on the supply logistics of mass-produced ingredients such as burger patties. The efficiency of fast food logistics is dependent on how the individual restaurant branches communicate with the inventory chain. All of these are possible because of computer the networks and databases that are updated in real time.

Information is both a commodity when it comes to business operations. It is a commodity because business entities purchase it in the form of software applications. Information also corresponds to the inventory or stocks of products. For some businesses such as online businesses, information is a commodity that they buy in the form of high traffic keywords. From smart phone software applications to database of prospective clients, information is a commodity that has a wide range of value depending on the practical use.

On the other hand, information is also a currency in literal and indirect sense. Bank accounts, transaction revenues, balance sheets, and other information mostly have electronic counterparts. Majority of these actually exist as purely encrypted information in some computer networks. The simple payment of fares in commuter trains, for example, can now be conveniently done using a smart phone. Utility bill payments can also now be done online through secured servers of banks. Of course, shopping can also be done through the internet. All of these involve the transfer and recording of information in the form of electronic money.

Businesses that have advanced IT systems are likely to be more competitive globally. Paper-less and cash-less transactions are now becoming a norm of global trade.

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