Business Value of Information Technology. The ways in which computers have been used has changed significantly with time, it was firs use as a tool for eliminating the labor intensive processes (Ward and Griffith, 1996), secondly it was on the developments of Management of information Systems that availed information for operational decision making and finally it was used as a transformation enabler through creation of novel products, product delivery methods, processes and market opportunities. Where Do we Create Business Value? There are functions that address the question, where to create the business value? The functions are inbound logistics, outbound logistics, customer service, operations, marketing and sales. Inbound Logistics: It entails procuring and capturing the input resources which are necessary for an organizations manufacturing, assembling and finally creating the output product.
Since data is a very crucial resource in very many organizations and data capture being a very intensive activity, Information Technology can significantly increase the procurement efficiencies which are necessary for just in time manufacturing, data interchange, and supply chain management. Organizations are also in a position to reduce their operation costs since they can easily participate competitively in electronic market places. Operations: This entirely focuses on organizational processes.
Re-designing organizational processes by usage of information technology products can improve a products quality, cost and speed up the manufacturing process which has a definite and direct advantage to the organization. Outbound Logistics: This is the way products and services are usually delivered to the clients of an organization. Some of the IT enabled revolutionary changes pertaining to outbound logistics are the hotel reservation systems, ATM machines and electronic commerce. These changes have proven to save time and money to an organization and improve on customer-organization relationship. Marketing and Sales: This is how organizations promote and sell their goods and services.
It contributes business value in sales and marketing through the information widely distributed on the internet, short messaging services or “Bluetooth marketing” Organizations save on marketing costs. Customer service: Customer Relationship Management system which are I. T triggered, add value to the organization by increasing knowledge of a particular clients purchases, contacts and behaviors with the organization. Online customer service increases the value of speed by enabling organizations and clients communicate with expediency around the clock, this also save them time and hence money.
Disintermediation which allows clients to access information directly, has also contributed directly to quality customer experience that in return enhances the client-organization relationship. Major Process Re-design activities. These are action triggers that direct end users within the process of triggering the model and is based on principles of Business Process Re-engineering. Here we concentrate on how processes may be altered in gaining business value. In order to change process and gain value, organizations may be forced to review non-value added process, integrate, simplify and automate their activities. Elimination of Non-Value Added process: Here new products may be posted on the organizations website in form of an electronic catalog with the most recent price list instead of manually mailing them to the agents or clients.
This eliminates unnecessary costs for the organization and increases speed of product delivery which are crucial business values. Instead of transporting forms for clients, they can be posted on websites for easy instantaneous downloads.