Role of Information Technology in Business

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From your company's online store to the enterprise software your business uses to record transactions and gather information, information technology has an essential role in your small business's daily operations and success. The role of IT in business is seen in how it can help your company become more productive, increase performance, save money, improve the customer experience, streamline communications and enhance managerial decision-making. It also plays a role in helping companies expand globally and in providing staff access to company information wherever and whenever they need it.

Improved Organizational Communication

An important use of technology in business is for communication through platforms such as conferencing software, email, video chat, company intranets and the internet in general. IT allows businesses to easily hold virtual meetings with staff and clients around the world without having to spend time and money on travel. At the same time, employees can access and share information and collaborate on their work regardless of location; employees can even work remotely so that the company can save on costs. Companies can also use platforms such as social media to address customer concerns more efficiently.

More Efficient Daily Operations

Another role of IT in business is to improve the efficiency of operations so that the company can complete tasks quicker and cheaper. This often happens with the help of enterprise software and a centralized company database.

Rather than having to get workers to count and monitor inventory, companies can use inventory management software that checks real-time levels, provides helpful reports to managers and can even trigger orders when the supply is low. Customer relationship management software has automated common sales and marketing tasks such as generating leads, sending promotions and tracking metrics. Companies can also take advantage of fully featured enterprise resource planning software to make it easier to do accounting tasks, manage human resources, monitor the supply chain, generate invoices and make supply purchases.

Better Customer Experience

IT also makes it easier to provide a good customer experience through improved customer service, easier customized marketing and e-commerce. Rather than only being able to reach the company during business hours, customers can conveniently interact with the company on its website and through social media, email and custom instant messaging services. Through tracking customers' previous purchases with marketing software, companies can send customized promotions that better meet customers' needs and result in more likely sales. Customers also benefit from being able to purchase products and services from the company's website, and this also increases the potential for more revenue and growth for the company.

Information Technology and Business Decision-Making

The role of information technology in management decision-making is seen in tools such as ERP software and decision support systems that help managers see company performance data in real time so that they can make more informed decisions. Such software presents an online dashboard with information about the company's finances, customers, sales and marketing trends and inventory levels. Managers can use the data to decide which products to promote or stop selling, where to cut expenses, which customers need support and when to place supply and materials orders.

Other Business Roles of IT

Other examples of IT's role in business include the following:

  • Internet-enabled systems, such as secure entry systems and wireless cameras, help improve business security and reduce risks of theft and loss of confidential information.

  • IT allows companies to store important company data in a database in the cloud to reduce paper waste, increase security and allow for easy backups.

  • IT allows companies to expand internationally as easily as setting up a multi-language website that markets to global customers and allows purchases in multiple currencies.

  • Companies can use online recruitment to find more qualified job candidates and handle most of the hiring process online.

  • From enabling telecommuting to reducing energy use through modern systems, IT has a role in company sustainability that can save money and improve the company's reputation.

  • Thanks to IT, getting the latest information about your competitors and the market is as easy as searching Google on your computer or smartphone.

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About the Author

Ashley Donohoe started writing professionally about business topics in 2010. Having eight years experience running all aspects of her small business, she is knowledgeable about the daily issues and decisions that business owners face. She also has earned a Master of Business Administration degree with a leadership and strategy concentration from Western Governors University. Some other places featuring her business writing include JobHero, LoveToKnow, PocketSense, Chron and Study.com.

Photo Credits

  • Monkey Business Images/Stockbroker/Monkey Business/Getty Images