Information Technology (IT)

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What is Information Technology?

Business Dictionary defines Information Technology as a, "set of tools, processes, and methodologies (such as coding/programming, data communications, data conversion, storage and retrieval, systems analysis and design, systems control) and associated equipment employed to collect, process, and present information." In broad terms, IT also includes office automation, multimedia, and telecommunications.[1]

While IT is often used to describe computers and computer networks, it actually includes all layers of all systems within an organization -- from the physical hardware to the operating systems, applications, databases, storage, servers, and more. Telecommunication technologies, including the Internet and business phones, are also part of an organization's IT infrastructure.[2]

Information Technology
source: The California Parks Company

Many companies now have an IT Organization (function or department) for managing the computers, networks, and other technical areas of their businesses. IT jobs include computer programming, network administration, computer engineering, Web development, technical support, and many other related occupations. Since we live in the "information age," information technology has become a part of our everyday lives. That means the term "IT," already highly overused, is here to stay.[3]

Typically, IT is used in the context of enterprise operations as opposed to personal or entertainment technologies. The commercial use of IT encompasses both computer technology and telephony. The term information technology was coined by the Harvard Business Review, in order to make a distinction between purpose-built machines designed to perform a limited scope of functions and general-purpose computing machines that could be programmed for various tasks. As the IT industry evolved from the mid-20th century, it encompassed transistors and integrated circuits -- computing capability advanced while varied responsibilities. These responsibilities range from keeping systems and data secure to keeping networks up and running. There are people who input data, people who manage databases, and people who do programming. There are also the decision-makers, such as Chief Information Officers (CIOs), who decide how an IT department will operate and what components will be purchased. IT also includes the management of data, whether it is in the form of text, voice, image, audio, or some other form. It can also involve things related to the Internet. This gives IT a whole new meaning since the Internet is its own realm. IT involves the transfer of data, so it makes sense that the Internet would be a part of IT. IT has become a part of our everyday lives and continues to proliferate into new realms.[4]

The Importance of Information Technology (IT)[5]

  • 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.
  • Information technology has given businesses 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 are 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 by 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.

Role of Information Technology in the Modern Organization[6]

Information technology (IT) has become a vital and integral part of every business plan. From multi-national corporations that maintain mainframe systems and databases to small businesses that own a single computer, IT plays a role. The reasons for the omnipresent use of computer technology in business can best be determined by looking at how it is being used across the business world.

  • Communication: For many companies, email is the principal means of communication between employees, suppliers, and customers. The email was one of the early drivers of the Internet, providing a simple and inexpensive means to communicate. Over the years, a number of other communications tools have also evolved, allowing staff to communicate using live chat systems, online meeting tools, and video-conferencing systems. Voice over internet protocol (VOIP) telephones and smartphones offer even more high-tech ways for employees to communicate.
  • Inventory Management: When it comes to managing inventory, organizations need to maintain enough stock to meet demand without investing in more than they require. Inventory management systems track the quantity of each item a company maintains, triggering an order of additional stock when the quantities fall below a pre-determined amount. These systems are best used when the inventory management system is connected to the point-of-sale (POS) system. The POS system ensures that each time an item is sold, one of that item is removed from the inventory count, creating a closed information loop between all departments.
  • Data Management: The days of large file rooms, rows of filing cabinets, and the mailing of documents are fading fast. Today, most companies store digital versions of documents on servers and storage devices. These documents become instantly available to everyone in the company, regardless of their geographical location. Companies are able to store and maintain a tremendous amount of historical data economically, and employees benefit from immediate access to the documents they need.
  • Management Information Systems: Storing data is only a benefit if that data can be used effectively. Progressive companies use that data as part of their strategic planning process as well as the tactical execution of that strategy. Management Information Systems (MIS) enable companies to track sales data, expenses, and productivity levels. The information can be used to track profitability over time, maximize return on investment and identify areas of improvement. Managers can track sales on a daily basis, allowing them to immediately react to lower-than-expected numbers by boosting employee productivity or reducing the cost of an item.
  • Customer Relationship Management: Companies are using IT to improve the way they design and manage customer relationships. Customer Relationship Management (CRM) systems capture every interaction a company has with a customer so that a more enriching experience is possible. If a customer calls a call center with an issue, the customer support representative will be able to see what the customer has purchased, view shipping information, call up the training manual for that item and effectively respond to the issue. The entire interaction is stored in the CRM system, ready to be recalled if the customer calls again. The customer has a better, more focused experience and the company benefits from improved productivity.

Information Technology and Knowledge Management [7]

IT provides a number of functionalities that may enable Knowledge Management. Table 1 provides a list of such functions and the IT that supports each function.

IT Functions
source: AIS Electronic Library

The role of IT in supporting the knowledge creation spiral proposed by Nonaka and Takeuchi. Socialization requires interaction between two or more persons with similar and/or overlapping interests. Communication, coordination, and group process support functions offered by IT are useful in facilitating the socialization process. Many organizations set up yellow pages that list experts and their fields of expertise. Such yellow pages facilitate socialization by pointing to the source of tacit knowledge. The yellow pages use the storage and retrieval function. The search process associated with these pages may be enhanced through the information location function. Knowledge acquisition techniques and tools can facilitate this process to some extent. The combination process creates explicit knowledge through transformation, analysis, and integration of available explicit knowledge. All IT functions with the exceptions of communication, coordination, and group process support are useful in facilitating combination. Internalization converts explicit knowledge into tacit knowledge. Knowledge location, browsing, filtering, and retrieval functions are useful in finding appropriate knowledge, while analysis and presentation functions are useful in assimilating knowledge from its explicit form into tacit form. Managing explicit knowledge requires significant investment in IT (Hansen et al., 1999). Knowledge extracted from experts, organizational policies and procedures, problem-solving episodes, etc. are captured in the organizational knowledge base. Browsing, presentation, location, and filtering functions are deployed to provide knowledge workers access to this knowledge. An expert system may also be used as a vehicle for knowledge reuse (Liebowitz and Beckman, 1998). IT, thus, plays a key role in facilitating knowledge creation and management.

Issues and Challenges in Information Technology[8]

  1. As computing systems and capabilities continue expanding worldwide, data overload has become an increasingly critical issue for many IT professionals. Efficiently processing huge amounts of data to produce useful business intelligence requires large amounts of processing power, sophisticated software, and human analytic skills.
  2. Teamwork and communication skills have also become essential in most businesses to manage the complexity of IT systems. Many IT professionals are responsible for providing service to business users who are not trained in computer networking or other information technologies but who are instead interested in simply using IT as a tool to get their work done efficiently.
  3. System and network security issues are a primary concern for many business executives, as any security incident can potentially damage a company's reputation and cost large sums of money.

Ethical Challenges of Information Technology[9]

  • Security: With tools like the internet, hackers have found it very easy to hack into any computer or system as long as it is connected to the internet. Hackers can easily use an IP (Internet Protocol) address to access a user’s computer and collect data for selfish reasons. Also, the widespread of internet cookies which collect information whenever we use the internet has exposed IT users to high risks of fraud and conflicting interests. Many big companies use these cookies to determine which products or services they can advertise to us. When it comes to online banking, the transfer of money can easily be interrupted by a hacker and all the money will be transferred to their desired accounts, which affects both the bank and the customers who are using online banking technology.
  • Privacy Issues: As much as information technology has enabled us to share and find relevant information online, It has also exploited our freedom of privacy. Their so many ways our privacy is exploited,
    • use of internet webcams, experienced computer users can turn on any webcam of any computer online and they will have access to your private life, many celebrities have been victims of these online stalkers. A good example is Dharun Ravia former Rutgers University student who was spying on his roommate through a webcam.
    • use of social networks, the main concept of these networks is to connect with new and old friends and then share your life with them, however, the loophole in this, is that whenever someone accesses your shared life data like photos, they can like it and send it their friends who are not your friends, which might expose you to users with wrong intentions to use your data, also some companies are known for spying on their employees via these social networks.
  • Copyright Infringement: Information technology has made it easy for users to access any information or artifact at any given time. With the increased development of music-sharing networks and photo-bookmarking sites, many original creators of these works are losing the credibility of their works, because users of IT can easily gain access and share that data with friends. Free music and file downloading sites are popping up on the internet every day, and lots of original work like music albums, and books, are being downloaded for free. In this case, one legitimate user will purchase the book, software, web template, or music album, and they will submit it to a free download site where others will simply just download that data for free. It is good news for the users because it saves them money, but it harms the original creator of these works. The government has closed some of these sites like, but many are popping up using funny URLs.
  • Increased pressure on IT experts. Since information technology systems have to run all the time, pressure is mounted on IT experts to ensure the accuracy and availability of these systems. Many big organizations which need to operate 24 hours will require a standby IT team to cater for any issues which might arise during the course of operation. This pressure results in stress and work overload which sometimes results in Imperfection.
  • Digital divide: Information technology has many opportunities and it has shaped many industries in developed countries; however, developing countries have difficulties enjoying the same benefits of Information technology. To get these benefits they have to train their labor and users should also adopt the new culture which is a bit costly in these developing countries. In some remote areas they do not even have power, so information technology tools like computers can not be used. In other sectors like education, most of these developing countries have poor old education systems, so a student will not be aware of new information technologies.

Advantages and Disadvantages of Information Technology in Business[10]

As with any invention, there are advantages and disadvantages to information technology. Some of the advantages and disadvantages of information technology are listed here.

Advantages of Information Technology

Information technology is a huge advantage to businesses by allowing organizations to be more efficient and maximize productivity. It allows for faster communication, protection of company records, and electronic storage. Every work environment is now dependent on computers and information technology. Other advantages of information technology include:

  • Protecting and Storing Information: Electronic storage systems are being created to hold the information that is being shared over the internet and internal intranets. Secure maintenance of customer and company files is vital to the integrity of the company. Virtual vaults keep information safe by limiting access to a select few. Security systems are put in place to protect your electronic information and keep it from being wiped out or damaged during a system breakdown. Hackers are also kept at bay with intense securities.
  • Automated Processes: The ability to find ways to complete more work in a shorter amount of time is essential to the success of a company. Information technology improves a company’s efficiency by implementing automated processes to make employees more capable of handling a larger workload. Reports, queries, and monitoring financials can be completed by computer programs, leaving employees free to complete other tasks.
  • Communication: Communication in every aspect of human interaction is essential. In the business world, communication is imperative to the success of the company. Emailing, video conferencing and chat rooms allow for easier communication between employees and supervisors as well as employees and clients.
  • Remote Access or Telecommuting: When a company has implemented an information technology system, many times employees can then access the company’s network electronically. This enables employees to work from home or while on the road. This gives the employees more flexibility and they are more productive because they can still work when not in the office.

Disadvantages of Information Technology

Information technology has changed the world around us. Communication is done much faster and global trade is becoming a simplified process. Although the benefits of information technology make it seem ideal, there are also some disadvantages of information tech that are listed below.

  • Expense of Implementation and Maintenance: Setup costs for implementing an information technology system within a home or business can be very costly. Software can training can also take another big bite out of the budget. Information technology systems, just like any other equipment, need to be maintained and repaired from time to time. But there are also updating and upgrading costs associated with IT systems.
  • Elimination of Jobs: By implementing IT systems into a company, tasks take less time, and therefore, employees have more time throughout the day. Paperwork is processed and filed immediately, reports are generated with the touch of a button and financial statements are generated automatically. Companies are finding that they can combine jobs and need a smaller staff to operate fully.
  • Breaches in Security: When information is stored electronically, there are more chances of having security breaches. Hackers are evolving along with technology and they are never up to any good. Security systems that were state-of-the-art last year are now out-of-date and in desperate need of upgrading. To protect company data, a security specialist should be kept on staff. While information technology is quickly becoming something that we cannot live without, there are many aspects that keep us on our toes. Trying to stay current on the changes and be able to afford the upgrades can be challenging. But when we understand the different aspects of information technology, then we can accomplish so much more than without it.

Advantages And Disadvantages Of Information Technology In Society[11]


  • Improved innovation: Technology has played a big role in job creation and emerging of technology-based companies. With access to a computer and the internet, anyone can start a business while at home. Most successful technology-based ventures like Google / Amazon / Facebook, to mention but a few, started from home but now they employ thousands of people.
  • Improved entertainment: Technology has changed the entertainment industry, nowadays we have many options to choose from, you can have a playlist of 10,000 songs in your palms with an iPod, and you can watch movies on the go with an iPad, the list is endless.
  • Improved social discovery: Finding both old and new friends has become very simple. With social networks like Facebook and Twitter, you can easily keep up with all your old friends and also make new ones.
  • Globalization of knowledge: Today you can use the internet to get the latest news from any country on the globe. Services like ‘’Twitter’’ have enabled people to become journalists so they report news on the instant by twitting. Services like are well equipped with data on about anything.
  • Improved communication:


  • Cyber-sickness: With the increased addiction to social networks and internet games, people are spending more time on computers and giving up on their normal offline life. This has resulted in relationship breakups and increased loneliness.
  • Social implications – access to harmful information which corrupts people’s minds and drives them to commit crimes. People use search engines to find information on how to create harmful weapons and how to commit wrong acts in society.

Information technology has helped in shaping both the business world and our society in general. Many fields have been impacted by information technology and these include; education, health, entertainment, and communication just to mention but a few. The impacts of information technology are profound. As the world develops, more technology will emerge and this technology will have both positive and negative impacts.

See Also


Further Reading