Architecture and Benefits of Information Technology for Business Strategy

By Prof T.R. Vaidyanathan

Information Infrastructure: An Information Infrastructure consists of the physical facilities , services, and management that supports all shared computing resources in an organization. There are five major components of the infrastructure: 1) computer hardware, 2) software, 3) networks and communication facilities(including the Internet and intranets), 4) databases and data workers, and5)information management personnel. Infrastructure includes these resources as well as their integration, operation, documentation, maintenance, and management.

IT Architecture
Information architecture is defined by the Information Architecture Institute as: The structural design of shared information environments. The art and science of organizing and labeling web sites, intranets, online communities, and software to support findability and usability. An emerging community of practice focused on bringing principles of design and architecture to the digital landscape.(Source: wikipedia) Information technology architecture is a high-level map or plan of the information assets in an organization, including the physical design of the building that holds the hardware. On the Web, IT architecture includes the content and organization of the site and the interface to support browsing and search capabilities. The IT architecture is a guide for current operations and a blue print for future directions. It assures managers that the organization's IT structure will meet its strategic business needs. What is the purpose of the IT Architecture? The purpose of the IT Architecture is to guide the process of planning, acquiring, building, modifying, interfacing and deploying IT resources throughout the Department. As such the IT Architecture should offer a means of stable evolution by identifying technologies that work together to satisfy the needs of the Department users.

The Business performance management cycle and IT model

Where Do We Want to Go? Mission, Goals, Objectives

How can we improve performance? Solutions, Critical Responses

Information Technology(IT)

How shall we Get there? Strategy, plan

How Well Are we Doing? Monitoring, Performance, Comparing

Information Technology Architecture IT Architecture is a high-level map or plan of the information assets in an organization, including the physical design of the building that holds the hardware. On the Web, IT architecture includes the content and organization of the site and the interface to support browsing and search capabilities. IT architecture is a guide for current operations and blue print for future directions. It assures managers that the organization's IT structure will meet its strategic business needs. Creating IT architecture is a cyclical process, which is driven by business architecture. It is the business architecture, which describes organizational plans, visions, objectives, and problems, and the information required to support them. The potential users of IT must play a critical role in the creation of business architecture, in order to ensure the business architectures are properly linked and meet the organization's long term goals.

What are some of the key benefits of an IT Architecture?

It will help to insure interoperability inside and outside IT and the Department. It's a way to inform developers of Department directions. It will help in making planning, development and purchase decisions. It will be useful in aligning information technology providers for the Department. It is a way to communicate direction (and changes) both inside and outside IT. It will reduce the maintenance and support requirements. It will help in planning migration to new technologies.

What is Strategy? Strategy is the component that defines how to achieve our mission, goals and objectives. It specifies the necessary plans, budgets, and resources. Strategy addresses fundamental issues such as the companys position in its industry, its available resources and options, and future directions. A strategy addresses questions such as: What is the long-term direction of our organization? What is the overall plan for deploying our organizations resources? What trade-offs are necessary? What resources will it need to share? What are our unique positioning vis--vis competitors? How do we achieve sustainable competitive advantage over rivals in order to ensure lasting profitability

Information Technology:
Information technology refers to the technical (as opposed to the social) side of an information system including hardware, software, networks, and other devices. Information Technology has become the major facilitator of business activities in the world today. IT is also a catalyst of fundamental changes in the strategic structure, operations, and management of organizations due to the capabilities. These capabilities support the following six business objectives: 1) Improving productivity 2) Reducing costs 3)Standardized processes 4)Improve workflow and communications 5)Improve risk control mechanisms 6)Improving decision making

Information Technology(Contd).. 7)Facilitating collaboration 8)Enhancing customer relationships 9)Developing new strategic applications 10)Gain Competitive advantage by exploiting new technology (A competitive advantage is the ability to produce, sell or service consumer goods better than other companies in the economic market. IT companies often develop these strategies to ensure customers continue to patronize the company through multiple purchases or upgrades. Strategies can include customer service, low price leadership or added benefits for consumer products. IT companies typically spend copious amounts of time and effort developing these strategies since this industry can be a cutthroat business environment).

Information Technology(Contd)..
What is Green IT and why has it become important. With an increased awareness about the damage to the physical environment and ecosystem, organizations and individuals are looking at potential improvements and savings that can be made in the IT industry. These efforts are known as Green IT. 11. List some environmental issues of data centers. Data center servers are known to consume a lot of energy and generate a lot of heat PCs generate CO2 (carbon dioxide) that damages the atmosphere Discarded PCs and other computer equipment cause waste disposal problems

Accounting Major The internet has vastly increased the number of transactions(especially global)in which modern businesses engage. Transactions such as billing customers, preparing payrolls, and purchasing and paying for materials provide data that the accounting department must record and track. These transactions, particularly with customers and suppliers, now usually take place online.
Finance Major The modern financial world turns on speed, volume, and accuracy of information flow. Information systems and networks make these things possible. You invest in stocks and get a confirmation in less than a second. Finance departments use information systems such as business intelligence to monitor world financial markets and to provide quantitative analyses (e.g. for cash flow projections and budgetary control). They use computerized analysis to support financial decision making (e.g. portfolio management). Financial managers use data mining software to analyze information in data warehouses. Finally, large-scale enterprise information systems (e.g. enterprise resource planning packages)tightly integrate finance with all other functional areas.

Human Resources Management Major Information systems provide valuable support for human resources management. For example, personnel record keeping has greatly improved in terms of speed, convenience, and accuracy as a result of technology. Further, disseminating HR information throughout the company via intranets enables employees to receive consistent information and handle much of their personal business (e.g. configuring their benefits) without help from HR personnel. The internet revolutionalized recruiting (e.g. online and in social networks) and training, moving them online; better selection can be made as well as personnel development IS major The IS department directly supports all other functional areas in an organization. The overall objective of IS personnel is to help users increase performance and solve business problems using IT. The IS function is rapidly changing its role from computer programming to that of major strategic player. While some IS employees still write computer programs, they also act as analysts, interfacing between business users on one hand and the programmers or vendors on the other.

Marketing major Marketing major now uses customer databases, decision support systems, sales force automation, business intelligence, and data mining software to better performs its functions. The internet has created an entirely new global trading environment and extensive internet marketing. It also has dramatically increased the amount of information available to buyers and seller, who can now compare prices quickly and thoroughly. As a result, shoppers buying habits and strategies are changing. In turn, marketing managers must work harder to acquire and retain the well-informed customers. To accomplish this goal they now use customer relationship management software and special online promotions. The internet helps, because it provides for much closer contact between the customer and the supplier, as well as one-o-one seller/buyer relationship. Of special interest are the new advertising approaches in social network services.

Operations management major Organizations are competing on price, quality, time()speed), and customer service-all of which are concerns of productions and operations management. Every process in a companys operations that adds value to a product or service(e.g. purchasing inventory, quality control, receiving raw materials, and shipping products)can be enhanced by the use of Webbased information systems. Production is changing from mass production to on-demand mass customization. Further, information systems have enabled the OM function to link the organization to other organizations along the firms supply chain. Performance in manufacturing can be significantly increased with IT support.

IT Support of the Upstream Supply Chain. The major IT support of the upstream supply chain (between a company and its suppliers) is to improve procurement activities and relationships with vendors. E-procurement is becoming very popular as it results in major savings and improvements in buyer-seller relationships. Relationships with suppliers can be improved by using a supplier portal and other supplier relationship IT tools. Also, wikis and blogs can be helpful. IT support of the Downstream Supply Chain: IT support of the downstream segment of the supply chain (between and its customers) is done in two areas. First, IT supports customer relationship management (CRM) activities, such as providing a customer call center. Second, IT also supports order taking and shipments to customers.

Managing Supply Chains It provides two types of software solution for this purpose-planning, organizing, coordinating, and controlling-supply chain activities. First is enterprise resource planning(ERP) software, which helps in managing both the internal and the external relationships with business partners. Second is SCM software, which helps in decision making related both to internal segments and to their relationships with external segments. One of the most promising tools of improving supply chains and their management is the use of radio frequency identification(RFID). It is an item identification method that is similar to a barcode since it contains readable information. Finally, the concepts of build-to-order production and e-commerce have a new spin lon supply chain management; for providing what customers really want for interactive elaboration.

IT support of other systems Industry-Specific System- These are systems that are designed to serve an industry such as banking, retail, transportation, oil, utilities, or universities. The systems can be specific for one or two applications, or they can be suites that cover multiple needs. Supporting E-Commerce Business Models- The use of ecommerce implies using business models such as e-auctions, exchanges, e-[procurement, or the use of electronic meetings. A large number of software vendors are developing IT software support for such business models. Supporting Online Search- Searching the entire Internet or even the files of one company and to do it in seconds, require the support of IT hardware, analytical programs (search algorithms) and other IT tools. Searching photos, videos, and audio can be even more complex, and it cannot be done efficiently without IT support. Supporting Social Networking: Social Network Services such as Face book and MySpace have multimillions of members and a very large number of daily visitors. To accommodate such traffic, they need an extensive network of services, security protection, many servers, and a large number of software based applications which largely depend on IT support

Some of the advantages of information technology include

Globalization - IT has not only brought the world closer together, but it has allowed the world's economy to become a single interdependent system. This means that we can not only share information quickly and efficiently, but we can also bring down barriers of linguistic and geographic boundaries. The world has developed into a global village due to the help of information technology allowing countries like Chile and Japan who are not only separated by distance but also by language to shares ideas and information with each other.
Communication - With the help of information technology, communication has also become cheaper, quicker, and more efficient. We can now communicate with anyone around the globe by simply text messaging them or sending them an email for an almost instantaneous response. The internet has also opened up face to face direct communication from different parts of the world thanks to the helps of video conferencing. Cost effectiveness - Information technology has helped to computerize the business process thus streamlining businesses to make them extremely cost effective money making machines. This in turn increases productivity which ultimately gives rise to profits that means better pay and less strenuous working conditions. Bridging the cultural gap - Information technology has helped to bridge the cultural gap by helping people from different cultures to communicate with one another, and allow for the exchange of views and ideas, thus increasing awareness and reducing prejudice.

Some disadvantages of information technology include: Unemployment - While information technology may have streamlined the business process it has also created job redundancies, downsizing and outsourcing. This means that a lot of lower and middle level jobs have been done away with causing more people to become unemployed.
Privacy - Though information technology may have made communication quicker, easier and more convenient, it has also bought along privacy issues. From cell phone signal interceptions to email hacking, people are now worried about their once private information becoming public knowledge.

Lack of job security - Industry experts believe that the internet has made job security a big issue as since technology keeps on changing with each day. This means that one has to be in a constant learning mode, if he or she wishes for their job to be secure.
Dominant culture - While information technology may have made the world a global village, it has also contributed to one culture dominating another weaker one. For example it is now argued that US influences how most young teenagers all over the world now act, dress and behave. Languages too have become overshadowed, with English becoming the primary mode of communication for business and everything else