How Business And Technology Development Are Connected

By Sarala Vanga On Dec 9, 2020

The role that IT plays in an organization largely determines the nature of the return on investment. Typically, it is a supporting role, which is consistent with the traditional approach where the corporate strategy is formulated somewhere “at the top” and transferred to the IT unit so that it can provide appropriate support. In this case, IT plays the role of the technology substrate that supports operational and control functions. Any organization can adopt this approach without making any significant changes in its organizational structure and business process system. With this approach, information technology, as an element of enterprise infrastructure, has a positive impact on business efficiency, but their opportunities are not fully disclosed.

How Business And Technology Development Are Connected

Organizations are increasingly coming to the conclusion that the reengineering of business processes in combination with the introduction of IT can lead to a drastic reduction in the time of production cycle, reduce labor intensity, improve the quality of customer service, reduce reaction time to changes in market requirements, etc. Achievement of these results requires IT employees – units knowledge in the field of business process organization. In most cases, a certain degree of involvement of IT-specialists in the company’s business is required, thus achieving the necessary level of understanding of external and internal business processes.

Information and IT components become an integral part of an increasing number of products and services. This leads to the need to involve IT specialists in the development of the corporate strategy. This role requires them to have a deep understanding of the market business and the industry in which the company operates.

Information systems are ambiguously considered when solving industry problems. In some industries, as a rule, they play the main role in the production, in others – in marketing. In western countries in many areas, industry leaders are so aggressive that they change the rules of competition, forcing them to accept their followers.

Usually, the following positive effects stand out:

Unfinished production and the duration of the production cycle (reduced investment in assets, reduced costs of moving materials, reduced production time, reduced stocks of semi-finished products of own production due to the reduced production cycle).
Inventories (lower investment in assets, lower cost of moving materials, higher service level).
Utilization of production resources (minimization of working time losses, changeovers, increase in equipment availability factor).
The decrease in material costs (partnership with suppliers, timeliness of incoming deliveries, the possibility of using small batches, reducing the share of defective materials).
Improving product quality (reducing waste, reducing violations of production schedules, reducing the number of changeovers, preventing sales reduction).
Improvement of service quality (reduction of delivery terms, ensuring the conformity between the stocks of finished products and customer demand, timeliness of deliveries, intensification of communication with customers).
Cost management (efficiency and accuracy of cost calculation (including on the basis of the functional and cost approach), the possibility of operational cost analysis, the possibility of analyzing the causes of deviations from the plan, determining the most cost-effective products).
Organization of storage and movement of materials (increase in efficiency while reducing labor intensity, improve the quality of service, more accurate and operational control).
Accounting and financial management (availability of accurate and timely financial information, optimization of financial relationships with suppliers and customers with the help of insurance software development companies).

These improvements are the result of direct factors affecting the company. These factors, first of all, include the advantages gained by the enterprise in the struggle for the market.