The Role of Information Technology in Business

IT (Information technology) provides commercial and industrial systems for businesses. These systems enable businesses to function effectively and efficiently.

The use of information technology systems in a business environment can be classified into four broad categories, namely, function, communication, management and enterprise.

Function IT Systems

These applications allow individuals to function effectively in the workplace. Examples of these systems are word processors, spreadsheets, statistical analysis software and computer aided design (CAD). Employees can work and perform their task individually or collectively using these software technologies.

Network IT Systems

Network IT allow effective communication within and outside an organisation. Examples range from simple e-mail (electronic mail) to blogs, wiki, IM (instant messaging) and electronic conferencing. These technologies promote interaction and collaboration among working groups and also facilitate quick information flow at all levels.

Management IT systems

MITS is a planned application that is designed to process data and transform it into useful information for management decision making.

In general, MIS are subsets of Enterprise IT systems. However, because of the vital role MIS play in a business environment, it is considered here as a major information technology for businesses.

Management operates at different levels and so it is possible to apply management information systems at these varied levels.

Basic examples of management information systems are human resources management systems, financial management information systems and marketing management information systems.

Enterprise IT Systems

Enterprise IT systems are technologies designed to integrate and manage entire business processes for large organisations. Typically, enterprise application software is hosted on large servers over a computer network. Transmission of information can either be internal or external.

Examples of enterprise information systems may be accounting software, health care specific software or electronic data Interchange (EDI). Another example of software within this category is CRM (Customer relationship management software).

Information technology plays various roles in business, and provides a huge range of capabilities that enhance management performance. It is therefore important to understand the four major categories of IT systems and their functions in a business environment.