Information Technology

Information Technology has emerged as a basic fact of life in the business strategies of major corporations. Information Technology facilitates the convergence of communciations, computers, and information. Although Information Technology has traditionally been focused on internal operations (e.g., administrative and backroom functions), its emphasis is increasingly shifting to external operations and creating connections that benefit the customer. No industrial sector will be more profoundly affected by this trend than the financial industry.

Business analysts agree that Information Technology is much more important today than it was in the past. At present, companies typically spend about 6 percent of their total revenue on Information Technology. This expenditure is expected to grow to almost 9 percent by 1999 (Haapaniemi, 1996, p. 24).

The United States is the leader in the Information Technology movement. Of the top 20 Information Technology companies worldwide, half are American. These companies include: IBM, Hewlett-Packard, Digital Equipment, EDS, Apple Unisys, Compaq, AT&T, Sun Microsystems, and Microsoft. Of the top 100 Information Technology firms worldwide, only 28 reduced their staff numbers for the five-year period between 1988 and 1993 (OECD, 1995, p. 36).

A case study of how major corporations are using Information Technology is Alcoa. In November, the company announced a $150 million joint venture, called the Common Infrastructure Initiative

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ganizational structure. According to one survey, about 60 percent to 70 percent of Information Technology spending is done outside of the information systems department (Haapaniemi, 1996, p. 24). Technology now allows information handling to be decentralized via the use of networks and personal computers. Thus the location of the hardware itself is no longer critical. This trend is criticized by some information specialists, who fear that too much control is being given to end users. Other specialists regard decentralization as an opportunity, partly because it makes end users more accountable. Information managers must seek a balance between what is centralized and what is decentralized, based on the information needs of the organization: "In terms of internal structure, information systems departments are abandoning technology-oriented divisions (computer applications, telecommunications, office automation, etc.) in favour of divisions related to types of customers and functional structures--the 'business within the business' concept" (Gunton, 1990, p. 251). A new era of participation has dawned for specialists in the Information Technology field. Whereas their previous role was seen as architects or builders of inform

Category: Science - I