The Basics – How Information Technology and The Internet Has Changed How We Do Business

Introduction: If you’re of a technical nature, you may be expecting to see words like TCP/IP, NAT, Spanning Tree Algrorithm, Subnet Masking, Edge Routers, and Cisco IOS. However, this brief article is not meant for you, it is a concise view of how communication technology has evolved the business sector in the US an across the world.

Information technology (IT), is defined as “the use of technologies from computing, electronics, and telecommunications to process and distribute information in digital and other forms” (ref: Encarta Dictionary.) Information Technology, particularly in telecommunications-based company applications, helps a corporation triumph over time, geographic, and cost constraints to build and sustain a successful business. These three tactical capabilities of telecommunications networks emphasizes how several e-business applications can help an organization capture and provide information quickly to end users at remote locations as a relatively cost effective solution, as well as supporting its strategic company objectives. Using telecommunications technology can bring together not only employees, customers, consultants, subcontractors, and suppliers, but hopefully new potential customers! Some details of the specific areas how communication technology brings value to a company and supports greater profitability:

  • Time Constraints-Eliminated: Provide requested information on a real-time basis to remote users (these can be internal company staff or existing, potential customers.) If you are using a Point-of-Sale operation, credit card approval without hesitation, thus getting closer to a paperless operation. International travel does not have to be in your plans, as this technology can replace these gatherings. You no longer have to spend unproductive hours in airports or suffer jetlag upon arrival/return.
  • Prohibitive Expenses- Removed: Minimize the cost to the corporation for long distance calls, international calling plans, or pay per use video conferencing sites. You may also find the need NOT to purchase that Video Conferencing Equipment and large conference table! Using more COTS communication techniques, utilizing the Internet, can be a very cost effective solution for many companies, vs. the cost of more traditional means of communication.
  • Geographic Constraints-Nonexistent: Present information about business transactions from remote locations. Use the Internet to receive customer orders from your sales staff around the world to a central company database. Merge this information into your order processing and/or inventory control application without human intervention. This approach provides enhanced customer service by eliminating additional delay in processing customer orders and reduces the time between shipment and invoicing, for improved cash flow. Using this technology can remove the need for costly business trips, or collaborative meetings with clients.

Strategic Capabilities e-Business Examples Business Value

The evolving trend in computing and telecommunications market is the volatile growth of the Internet.

The Internet has become the principal and most significant network identified to date, and has migrated into a global information superhighway. The Internet is continually intensifying, as more and more businesses and other organizations (and their users), computers, and networks join this global society. The interconnection of thousands of network routers, switches and other equipment provides the means for millions of computer systems and users around the globe can communicate to each other. These computers are owned by of business, universities, clients and joint business partners. The Internet has also become a key stage for a rapidly expanding list of information, services and business applications, including electronic-commerce systems supporting the public to purchase items directly from the vendor.

Websites offer information and support direct ordering systems for electronic commerce between businesses, their suppliers and consumers. E-commerce websites usually offer all the products and services of regular retailers. Many businesses have setup business-to-business transaction accounts to provide immediate confirmation of purchase orders or inform the buyer of the status of their order. The Internet also provides “discussion forums” formed by thousands of special-interest newsgroups. You can contribute in discussions or post messages on any of these topics for other users, to which they can read and respond. In addition, you can make online searches using search sites and search engines such as Google, Yahoo!, MSN, ASK, and others. To assist in relatively quick and timely communication medium, you can utilize “chat” software applications to communicate in real-time.

This is very effective in getting a quick question answered or providing information to someone in need. Business use of the Internet has expanded from into a large platform for deliberate business applications. Collaboration among business associates, providing customer and vendor support, and electronic business have become major industry uses of the Internet. Companies are also using Internet technologies for marketing, sales, and customer relationship management applications, as well as cross-functional business applications, and applications in engineering, manufacturing, human resources, and accounting Utilizing Commercial-Off-The-Shelf (COTS) software, or applications included in many Operating Systems (Linix, Windows, etc) the company engineers can now hold virtual meetings in which drawings can be viewed in real-time, on a virtual “whiteboard”. Those attending can monitor, revise or comment on the drawings as the meeting unfolds. One example is the IBM implementation of “Sametime┬«”, in which global meetings can be implemented using the Whiteboard approach. If the company finds value, they can involve their customers to also attend anywhere in the world. This collaborative effort can be priceless, as bringing experience from around the world may just save an error in design, or provide a cost improvement suggestion to bring down costs of the product or service.

Primary uses of the Internet’s are:

  • Downloading: Transfer data, electronic files, software, reports, articles, information, drivers and applications to your local system.( Insure your computer is protected with virus and spam/malware protection software!)
  • Discussions: Participate in discussion forums or post messages on specialized forums created by thousands of special-interest groups.
  • Chat: Hold real-time text conversations in chat rooms with Internet users around the globe. Text orientated cell phones are now enabled to participate in this means of communication.
  • Surf: Navigate to hundreds of thousands of hyperlinked websites and assets for information, leisure, or electronic commerce.
  • E-Mail: Use e-mail to exchange electronic messages with other clients, customers or business partners. This has become the standard in timely communications between and within businesses.
  • Purchasing: You can purchase anything via e-commerce retailers, service providers, and other websites offering “shopping carts” and checkout applications.
  • Remote Access: Log on to your corporate computer system and resources. Utilizing a VPN (Virtual Private Networking) application is paramount to providing a secure medium through the Internet. This is valuable to insure your data is not intercepted or used by unauthorized users.
  • Video Conferencing: This is the most efficient means to communicate with other business partners or your corporate employees. Using a inexpensive webcam and free application software can make this a very cost effective means to interface with others.

Each year, companies develop other uses for the internet, which as replaced many older means of telecommunications. Gone are the old modems, dial-up circuits, and leased lines. VPN via the Internet has replaced many dedicated communication circuits, as Internet Service Providers (ISP’s) have taken on a greater role. Service Level Agreements (SLA’s) have become second nature where a company is guaranteed a predefined level of service (quality) relative to their data circuit operation. At this point in time, the Internet is evolving again, noted as Internet 2.0. Software as a Service (SaS) is becoming a new business model for developing business applications. SaS allows a company to use application software located on a separate computer across the Internet, to support their business. It is less costly than “buying” the software, as you only pay for the time it is being used. Also, having this as parts of your disaster recover and backup planning can also simplify your business processes.

In 1964 Gordon Moore, of Fairchild Semiconductor Corporation in the United States, predicted that the number of transistors that could be fabricated on a processor chip would double every year. Known as “Moore’s law”, this roughly holds true (actually about every two years). It is unknown where or how the Internet will eventually evolve. However, many of us have not known this medium until we joined the working force. Now our children are exposed to this in school, any many know more about its operation and usefulness than many adults. What will it look like to our grandchildren?

Information Technology Degrees – How to Find an Accredited Technology School

If you have just graduated from college with a degree in technology, you are well on your way to securing a stable position in one of the world’s fastest growing industries. Job growth in information technology is expected to reach 17 percent for the 2008-2018 decade. This translates to more than 50,000 new jobs in the coming years.

Information technology graduates will have their pick of top paying careers such as lead applications developer, network manager, senior IT auditor, applications architect, data modeler, senior web developer, business intelligence analyst, network manager, and many others. These careers pay an average of $74,250 per year on the low end (data modeler) up to $120,000 on the high end (applications architect). If you are considering a career in software publishing, with experience, you can expect to earn an average annual salary of $126,840+.

If you are considering a career in information technology, you can rest easy knowing that information technology degree programs are plentiful. You may choose to earn your degree at a technical college, business college, specialty school or traditional college or university. Information technology degrees are also flexible when it comes to formats. You may earn your IT degree on campus, online, or through a blended program (online and on-campus).

No matter which type of learning institution or format you choose, you must make sure the college or program is accredited by an agency recognized by the U.S. Department of Education. Many of the top accrediting agencies are listed below, but keep in mind that these are no the only recognized accrediting bodies. Please visit the U.S. Department of Education website for a complete list.

-Association to Advance Collegiate Schools of Business (AACSB)

-Association of Collegiate Business Schools and Programs (ACBSP)

-Council for Higher Education Accreditation (CHEA)

-Distance Education and Training Council (DETC)

-The National Association of Schools of Art and Design (NASAD)

-Western Association of Schools and Colleges

-Southern Association of Colleges and Schools

-Northwest Commission on Colleges and Universities

-North Central Association of Colleges and Schools

-New England Association of Schools and Colleges

-Middle States Association of Colleges and Schools

If you are applying to an online school, make sure the school follows the standard traditional procedures for admission. Anything less might be a red flag.

Top information technology degree programs typically admit students with a high GPA (3.00 or above) and students that have submitted a completed admission application, official test scores and transcripts, an application essay, recommendation letters, and if applicable, a sample of students work.

To locate information technology degrees, try college directories and college ranking websites such as Princetonreview.com or Petersons.com. These types of websites have already completed most of the searching for you. You may also use Bing, Ask.com or Google if you don’t mind browsing through hundreds of results.

How to Establish a Budget and Buy New Information Technology

The traditional approach to purchasing technology may be stated as follows (with minor variations):

1. Create a budget

2. Create a requirements list

3. Review technology demonstrations

4. Get proposals from the technology providers

5. Buy from the lowest bidder if they meet the basic requirements

What’s wrong with this picture? Let’s drill deeper beginning with “Create a budget.”

Typically the budget is predicated on what the organization thinks they want to spend on their new technology. This is precisely the wrong starting place. The enterprise ought first to determine what strategic and tactical benefits they want their new techology purchase to deliver. They should determine, in advance, how they expect their new investment in technology will help them increase throughput, reduce inventories and other investment demands, and hold the line or cut operating expenses. These goals should be quantified and they should be rational. For example, the organization might say:

INCREASING THROUGHPUT – Investment in CRM will help us segment our market in ways that will allow us to make more targeted win-win offers to our existing customer base while simultaneously giving us opportunity to make offers to new customers that will grow our market share. Combined, we expect these two effects to add $4 million in revenues over two years and an estimated $260,000 to net profits before taxes (NPBT).

REDUCING INVENTORIES/INVESTMENT DEMANDS – Investment in improved warehouse, inventory management, and inventory replenishment (supply chain) technologies will allow us to reduce overall inventories by an estimated $2.5 million over two years. By reducing inventories, this will relieve pressure on demands for new warehouse and production floor space. Thus, demands for new capital investments are also attenuated. The forecase $2.5 million reduction in inventories should save the enterprise an estimated $72,000 in carrying costs in year one and $136,000 in carrying costs in year two after go-live.

HOLDING THE LINE ON OPERATING EXPENSES – The improved accuracy and enterprise-wide data visibility provided by the new ERP (enterprise resource planning) system should reduce the requirements to add personnel as revenues increase. Our expected benefit would be 4.2 FTEs (full-time equivalents) over the coming two years at an average FTE cost of $78,000 per year for a total estimated benefit of $3.28 million over two years.

Summary of Net Estimated Benefits Over Two Years:

INCREASED THROUGHPUT $ 260,000

REDUCED INVENTORIES/INVESTMENTS $ 208,000

REDUCED OPERATING EXPENSES $3,280,000

TOTAL ESTIMATED BENEFIT (2 YEARS) $3,748,000

Having completed this kind of analysis, the organization has now quantified what it hopes to gain from its investment in the new techologies. More than that, the management team is in a far better position to determine “requirements.” The requirements list will no longer be the 300 or more mostly meaningless items garnered from current users that do little more than reiterated things like “Must be able to print a check.” Instead, the team is ready to focus on that relatively small handful of things that a technology provider might show them that will really help them achieve the enterprise’s goals for meaningful improvement. Equally important, the management team is now prepared to set a meaningful budget based on realistic expectations and forecasts of return on investment (ROI).

SUMMARY

Business owners, executives, and managers that assume that buying information technology is best done by setting a budget, considering the options, and then buying from the lowest bidder are likely to be disappointed. This is especially true if their budget amounts to nothing more than a guess-timate of what they think their “new system” should cost. If they have not set strategic goals for their investment in new technologies, then their purchasing process will lack focus and it is all too likely that their acquired technology will not be fully integrated with their corporate strategies. Furthermore, using the traditional approach will mean that it is less likely — not more likely — that the new technology will not deliver the return on investment (ROI) that stakeholders wanted.

(c) 2008 – Richard D. Cushing