Operations & Information Technology

Published by MBA Skool Team, Published on May 17, 2014

“Information technology and business are becoming inextricably interwoven. I don't think anybody can talk meaningfully about one without the talking about the other.”

- Bill Gates

As rightly said by Mr. Bill Gates in the above lines, information technology is an important part of any business operation. In today’s growing market every company has to keep up with the latest developments in the world. And this is only possible with the use of information technology and its applications. For example, every company is now a days to moving from manual record keeping to digital record keeping. There are many other examples in the market which prove this fact. This is applicable in the industry in spite of sector focused upon. So, the role of information technology can never be ignored in the Operations also.

Image Courtesy: freedigitalphotos.net, kangshutters

Operations can be defined as processes that transform resource or data inputs into desired goods, services, or results, and create and deliver value to the customers. The companies which operate in this type of work are referred to as Operations Company. These company deal with products which are of huge investments and to manage this kind of investments information technology tools come very handy. Apart from handling investments and records, there are many other roles in which information technology plays an important role in the working of any Operations company. There are numerous processes in any operations organization such as logistics, manufacturing, procurement, etc. In order to make a sync between all these processes, some automated system is required which can be attained with the help of information technology only.

The management of Information Technology and Operations in an integrated manner and their strategic alignment with business models is essential to achieving business success. Operational excellence is the key driver to performance in a world that is increasingly driven by information. This helps in optimizing costs of workload and thereby helps in increasing the revenues.

In the field of operations, a company requires to make and receive orders, make forecasts, analyze the various data available. These can be best done with IT. Even in warehouses, barcodes and RFID techniques used are the direct application of information technology. Nowadays even we see that many operations are moving towards more and more automation, which requires it to be integrated with IT and associated systems. The big robotics applications which is used in shop floors are IT enabled and controlled via some computer or a predefined program. Considering the example of Ford Motor Company, in which all the assembling is done by giant robotic arms. These arms are responsible for all the assembling of the various parts of cars. These are controlled by already fed programs into the system controlling the arms. Apart from all this, various analysis in the organization is also done by the help of IT programs. Various softwares and models used in the forecasting, procurement, etc. are done on computers, thereby use of IT.

Apart from the various processes in any operation, IT is useful in managing human resources as well. In maintaining a record of workers coming and leaving from the office or shop floor can easily be obtained using scanners at the doors. This helps in reducing the human effort to make note of all the movements. Also they can be checked automatically, if they would be taking any secured information out of the company’s premises. Thereby, maintaining secrecy in the organization.

The growth of IT technology in the recent few years has imposed a tremendous challenge on these companies to integrate these recent developments into their system. In order to fight this growing competition companies have to keep up with the recent developments in the world which is only possible with the use of information technology. It has become an unavoidable part of any organization.

As rightly said by Peter Drucker, "The new information technology... Internet and e-mail... have practically eliminated the physical costs of communications”. This has drastically reduced the cost which was incurred by companies on communication. Now companies are focusing on these IT tools to reach the consumers. The use of IT has even made inroads into rural areas and companies are using e-kiosks aimed at reaching consumer directly. Companies in order to reach consumers residing in the remote and rural areas are generally approached via some information technology means.

Even though IT is very useful to the industry, it has few disadvantages too. It is due to the use of IT systems all the important information of the companies gets leaked to the market much more often nowadays (even though various preventive measures are being taken). The recent Apple vs Samsung patent case was a clear example of misuse of IT. In any operations industry, due to use of more and more IT infrastructure many jobs are being lost. This may be an advantage to the company but is a disadvantage to the society at large.

In a nutshell, we can say that information technology has become an integrated part of the industry and its role is everlasting. In the words of Robert Redford, “It's hard to pay attention these days because of multiple effects of the information technology nowadays. You tend to develop a faster, speedier mind, but I don't think it's necessarily broader or smarter.”

This article has been authored by Aakash Kumar Varma from NITIE, Mumbai


• http://www.gartner.com/technology/research/infrastructure-operations-management.jsp

• http://www.stern.nyu.edu/AcademicAffairs/Specializations/ManagementofTechnologyandOperations/

• http://www.oliverwyman.com/financial-services-strategic-IT-operations.htm

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