The Role of Information Technology with Regard to the Areas of Productivity - Essay Example

The Pros And Cons of Information Technologies In Relation To Productivity, Health and Democracy (Student Name) Introduction The use of Information Technologies (or IT as it is commonly referred to) has become second nature to most of us today. With advancing technologies, the opportunities and possibilities of Information Technology improving the quality of everyday life, seem endless. The computer, that twenty-five years ago, was tucked away and housed in environmentally protected areas only, has become commonplace now, with desktops, laptops and other devices invading everyday life. There is no taking away from the fact that Information Technology has impacted the world in a significant manner. This paper will focus on the role of Information Technology with regard to the areas of productivity, health and democracy and analyse the pros and cons of using the same. Defining Information Technologies Broadly put, Information Technology is the use of software and computers to manage information and in some companies, it is referred to as ‘Information Services’ (IS) or ‘Management Information Services’ (MIS). In a large corporation, Information Technology consists of storing, protecting, processing, transmitting and retrieving information as necessary. “Computeris(z)ation’s main task is to process and analys(z)e information, and information is a commodity that is very hard to value” (Baily, Burtless, and Litan, 1993, 88). Information Technology and Productivity The inter-link between IT and productivity is an extremely widely debated topic as computing power that is delivered in an economy like the US has increased significantly as compared to the figures of 1970, however this same growth has not been witnessed in the service sector. In fact, by the same measure, the service sector seems to have stagnated. In 1996, the Nobel Laureate Economist, Robert Solow, as said, “we see computers everywhere except in the productivity statistics”, suggesting that claims of increased productivity with the use of IT is highly exaggerated. Before taking a stand one way or the other, we must keep in mind that just because we lack evidence that supports IT and productivity, it does not mean that this does not exist. “Since knowledge workers constitute more than half of our workforce, improving their productivity is the linchpin upon which hangs the future prosperity of the nation. At the end of the day, this means we have to find metrics that measure quality rather than quantity.” (Wriston, 2007, 95). Advantages Let us now look at the pros of the use of information technology and productivity. According to a recent survey sponsored by Kelly Services, 78 percent of the workers in the United States and Canada feel that the use of laptops and mobile phones have helped increase their productivity. The same survey states that 7 out of 10 workers from all countries around the world shared the same opinion. The use of technology has increased productivity in many areas. However, there is no one paradigm to measure the impact of IT on business production processes and productivity. This is because IT applications are used differently across industries and even sub-categories of industries. Retail companies have used IT to improve their supply chains and managing activities such as inventory, purchasing etc; and the banking sector has used IT for computerised voice response units. If one were to consider banking, technology investments made by the banking industry during the course of the 1990s, have clearly paid off. Banks saw a huge increase in phone inquiries and requests from customers. The number of phone inquiries grew from just over 1 million in 1994 to 2.3 million in 1998 (Baily, 2003). This shows that the investment in Information technology by the banks allowed an expansion of banking services and increase labour productivity. Enterprise Resource Planning (ERP) software has had a positively impact in many companies as is evident by the growth experienced by SAP, a leading ERP software provider. Chip design has also positively helped increase productivity. The significant improvements and developments in the areas of electronic design and testing tools have increased productivity in the workplace. Disadvantages There are several people who feel that Information Technology does not necessarily benefit companies and increase their productivity. Let us look into the disadvantages of the use of Information Technology in order to up the productivity. “Independent of its implications for productivity, growth in the white collar workforce cannot be attributed solely to information technology” (Zelkowitz, 2007, 191). Some of the factors that affect IT productivity are things such as support costs, support development problems, Software maintenance costs and incompatible systems and workarounds. Let us look at the massive investments made by the banking industry for computerised voice response units. The fact is that customers would rather talk to human personnel as compared to a machine and this could prove to be an annoying factor for them. This is the reason that banks began to employ people to handle calls. Another thing that happened in banks is that the installation of more powerful desktop computers did not improve the banking usable capabilities. Another example where Information Technology did not increase productivity is in hotels, where CRM (Customer Relations Management) software did not yield measurable benefits. Also while it is true that Y2K upgrades were required, it did not necessarily impact performance in a positive manner. Information Technology and Healthcare Information technology helps improve the safety, quality and efficiency of the healthcare industry. However, thus far there is not too much diffusion of Information Technology in the healthcare sector due to the cost and complexity of IT implementation, which goes beyond acquiring technology to changing work processes and cultures. With the effective use of Information Technology, healthcare providers can store, collect, retrieve and transfer information electronically. The challenge lies in the fact that in the healthcare industry there is a lack of precise definitions, no consistency in the volume of applications and a rapid change in technologies. Advantages In 2000, the Institute of Medicine (IOM) released a report focusing on patient safety estimating that “44,000 to 98,000 people die in U.S. hospitals as a result of medical errors ” (Report to the Congress: New Approaches in Medicare, 2004) The use of Information Technology helps in improving the care in individual settings by reducing medication errors, including adverse rug events, allowing the prescription of certain medication more precisely, decreasing dosage errors etc. Electronic health records make sure that health information is made available to both the healthcare providers and the patients as and when they need it, at the drop of a hat. Disadvantages We have already mentioned that the use of Information technology in the healthcare sector is expensive and complex. Some initiatives have of IT in healthcare have failed miserably. For instance, in the case of managing heart disease, a study in the U. S has shown that sophisticated reminders from an Electronic Health Record did not improve the adherence to the accepted guidelines or outcomes for heart patients (Tierney et al. 2003). Another problem that plagues IT implementation in the healthcare industry is the fact that the rotating staff in most hospitals does not receive sufficient training. In addition, physicians in most hospitals are overworked. Also, automated systems are prone to committing errors and as per a report that appeared in U S Pharmacopoeia, 10% of medication errors are due to computer entry errors. Information Technology and Democracy Local and national politics in countries around the world, and the US in particular, is being greatly influenced by the Internet. The World Wide Web allows all the federal agencies in the United States to maintain their own websites and inform people about their missions and services. The Internet is also being used by Senators, people’s representatives and their committees to promote citizen participation in the governing process. Also organisations use emails to directly lobby ministries and governments and this is empowering citizens to strengthen the democratic process. Advantages Social, economic and political institutions across the world are utilising cell phones, the Internet and other related technologies to their advantage. In the hands of the right leaders, reformers and activists, this can prove to be a powerful means of bringing about a tremendous change in the political landscape worldwide. The use of Information Technology in democracy increases the accountability and transparency of governments. It also promotes citizen advocacy and allows for the strengthening of the democratic process and enhancing efficiency. Technology use in the democratic process improves communication, provides access to important information. Disadvantages The Internet provides access a forum for people of all groups from across the world to network with each other and voice their opinions. There are a many undemocratic elements that can use this technology to spread messages of hatred and negativity causing social and political unrest in countries around the world. Conclusion We can conclude that with regard to information technology and productivity, while it is true that in some cases, information technology increases productivity, this is not always the case. It needs to be also supported by changes in employee behaviour and changes in organisational and business processes. The use of Information technology in the area of healthcare is growing, despite the barriers faced by providers. The risk of investment in IT for this sector is extremely high and the implementation of IT is difficult. However, the adoption of IT in this sector will improve the quality of healthcare immensely. Information Technology has played a positive role in encouraging transparency and increasing information flow amongst the government and its citizens. However many unruly and radical forces can misuse this technology to their advantage and steps need to be implemented to curb this misuse. Overall, I am of the opinion that Information Technology has played a significant role in enhancing productivity, healthcare and democracy. REFERENCES Baily M. N, Federal Reserve Bank of San Francisco’s Center for the Study of Innovation and Productivity Conference on Technology, Productivity, and Public Policy, 2003. Conference Proceeding Baily M. N, G.T Burtless, and R.E Litan, Growth With Equity: Economic Policy Making for The Next Century, 1993, Brookings Institution Press, Washington DC. Book. Report to the Congress: New Approaches in Medicare, 2004. Online http://www.medpac.gov (Accessed on August 7, 2009). Journal Article. Tierney, W. M., J. M. Overhage, M. D. Murray, et al, 2003, Effects of Computerized Guidelines for Managing Heart Disease in Primary Care. Journal of General Internal Medicine. vol.18 no.12. Journal Article. Wriston W.B, Bits, Bytes and Balance Sheets: The New Economic Rules of Engagement in A Wireless World, 2007, Hoover Institute Press, Stanford University. Book. Zelkowitz M. V, Advances In Computers, Architectural Issues, 2007, Academic Press, United States. Book. Read More