by Investing in information technology can play a critical role in your company’s success. In order to create business value with information technology, you need a clear set of goals and mechanisms to track the return on investments.
Create company goals. The goals of your company will define what value means to your business. Gather the major stakeholders of your business including employees, upper level management, major suppliers and company owners. Define a common set of goals for your company that can benefit every stakeholder. Narrow the list to four or five goals in order of importance.
Map out the “Value chain” for each goal. Take each company goal and draw a visual map showing the current state of the process starting from the customer and ending with the product or service delivery. For example, if your goal is to make DVD rentals in your DVD store more accessible to your customers, you would map out how the current customers go about renting a DVD. Information technology usually simplifies repetitive systems. If your customers commonly perform the same actions to rent a DVD, then you could automate the process with technology.
Calculate the benefit of an automated system. This is not always easy to do as financial benefits can be subjective and projections based on faulty assumptions. Take each one of your company goals and place a monetary value to the achievement of each goal. In other words, ask yourself how much money you will make or save if you were to accomplish each one of your company goals. If your company goals are monetary, then you can compare it to the expense of implementing information technology. If the expense of the implementing information technology can help you achieve your company’s financial goals then the technology is creating value. A simple example is being able to accept credit cards. If the cost of buying and setting up the credit card processor helps you close more sales, then the technology is adding value to your business.
Create a trial period for the system. Implement information technology in a small area of your business, and track the results compared with the current system. In some cases this may not be financially feasible since implementing technology for a trial period may be too costly. In this case you should create surveys and focus groups to determine if the customer or employee will embrace the new technology.
Automate repetitive processes. The easiest way to create business value through information technology is to automate or replace old systems with technology. For example, a small business that prints forms to get approval signatures from several departments, can simplify the process by having each department access the document via Google docs, and only print when all the authorizations have been granted. Your company can electronically share databases among many departments where previously only one or two people had access to the files. Minor improvements like these are easy ways to create value through information technology.
The Rise of Innovation
The rise of innovation can be traced to the human race getting smarter. According to the Flynn Effect, general IQ has begun to rise since the 1930s. The average IQ has risen from 80 points to 100 points.
While innovations in travel and multimedia improved collective intelligence, these were mainly passive forms of learning. Today, computer applications and the global brain have switched on active learning and improved how fast people learn new things.
Innovation in Business
Information technology fosters innovation in business. Innovation results in smarter apps, improved data storage, faster processing, and wider information distribution. Innovation makes businesses run more efficiently. And innovation increases value, enhances quality, and boosts productivity.
Innovation through information technology has created the following radical changes in business:
- Online shopping is more efficient than shopping in a store.
- Digital marketing is more efficient than high cost newspaper, television, and radio advertising.
- Social networking is more efficient than going to clubs.
- VoiP communication is more efficient than legacy telephony.
- Cloud computing is more efficient than a private computer network.
Businesses that have embraced the innovation paradigm tend to have the following characteristics:
- They have more accurate business planning
- They have more effective marketing
- They have higher global sales
- They have more systematic management
- They use real time monitoring
- They offer instant customer support
In fact, it’s hard to thing of long term business growth without the push of information technology.
5 Reasons for Accelerated Business Growth
The technological revolution has improved businesses this century in the following five primary ways:
- Information technology has given business the tools to solve complex problems.
Improved hardware (more memory, faster processors, sharper visual displays, etc) combined with smarter applications (Mindmapping software like X Mind, collaborative software like Kanban boards, organizers like Google calendar, etc) have made it easier to research data, analyze it, and plan scalability. Many tools available to solve complex problems.
- Information technology allows businesses to make better decisions.
Good decisions in business are based on solid market research. This can be done through engaging teams through video conferences, reviewing public sentiment on social media and industry forums, and using online surveys to get customer feedback. There are also tools like Microsoft CRM Dynamics and Google Analytics.
- Information technology has improved marketing.
Internet marketing using online advertising methods (SEO, PPC, Facebook Ads) are far more accurate ways than traditional marketing of finding target audiences, discovering their needs, and building a marketing campaign to persuade them to buy. It’s difficult to see how many people read a newspaper ad. It’s easy to figure out how many people clicked on an online banner.
- Information technology has improved customer support.
Customers can receive support from multiple channels telephone, emails, social media platforms, webinars, and so on. Additionally, customer relationship management systems help businesses understand customer behavior.
- Information technology has improved resource management.
Cloud computing allows a company’s employees to use any device anywhere in the world to access their enterprise level software.
