Source:
E-mail dt. 7 June 2012
Role
of IT in Business
Dr.
R. Karuppasamy M.Com., MBA, M.Phil.,
Ph.D., PLME
Director, Management
Studies, SNS College of
Technology, Coimbatore, Tamilnadu, India
and
Mr. C. Arul Venkadesh
MBA, PGDPM (IRLL), (PhD)
Assistant Professor – Department of
Management Sciences, CIET College, Coimbatore,
Tamilnadu, India
ABSTRACT
It is widely acknowledged today that new
technologies, in particular access to the Internet, tend to modify
communication between the different players in the professional world, notably:
relationships between the enterprise and its clients, the internal functioning
of the enterprise, including enterprise-employee relationships, the
relationship of the enterprise with its different partners and suppliers. The
term "e-Business" therefore refers to the integration, within the
company, of tools based on information and communication technologies
(generally referred to as business software) to improve their functioning in
order to create value for the enterprise, its clients, and its partners.
E-Business no longer only applies to virtual companies (called click and
mortar) all of whose activities are based on the Net, but also to traditional
companies (called brick and mortar).
The term e-Commerce (also called Electronic commerce), which is
frequently mixed up with the term e-Business, as a matter of fact, only covers
one aspect of e-Business, i.e. the use of an electronic support for the
commercial relationship between a company and individuals. The purpose of this
document is to present the different underlying "technologies" (in
reality, organizational modes based on information and communication
technologies) and their associated acronyms. Some common security concerns for
e-Businesses include keeping business and customer information private and
confidential, authenticity of data, and data integrity. Some of the methods of
protecting e-business security and keeping information secure include physical
security measures as well as data storage, data transmission, anti-virus
software, firewalls, and encryption to list a few. While some use e-commerce
and e-business interchangeably, they are distinct concepts. In e-commerce,
information and communications technology (ICT) is used in nter-business
or inter-organizational transactions (transactions between and among
firms/organizations) and in business-to-consumer transactions (transactions
between firms/organizations and individuals).In IT business world, ICT is used to
enhance one’s business. It includes any process that a business organization
(either a for-profit, governmental or non-profit entity) conducts over a
computer-mediated network. A more comprehensive definition of e-business is:
“The transformation of an organization’s processes to deliver additional
customer value through the application of technologies, philosophies and
computing paradigm of the new economy.”
Keywords: Internet,
Communication technologies, Information, Information communication
technologies, e-Commerce.
INTRODUCTION
Information And
Communication Technologies business commonly referred to as "eBusiness" or "e-business", or an internet
business, may be defined as the application of information
and communication technologies (ICT) in support of all the activities of
business. Commerce constitutes the exchange of products and services between
businesses, groups and individuals and can be seen as one of the essential
activities of any business. Electronic commerce focuses on the use of ICT to
enable the external activities and relationships of the business with
individuals, groups and other businesses. Louis Gerstner, the
former CEO of IBM, in his book, Who Says Elephants Can't Dance? Attributes the term "e-Business" to IBM's marketing and
Internet teams in 1996. Electronic business methods enable companies to
link their internal and external data processing systems more efficiently and
flexibly, to work more closely with suppliers and partners, and to better
satisfy the needs and expectations of their customers.
In practice, e-business is more than
just e-commerce. While e-business refers to more strategic focus with an
emphasis on the functions that occur using electronic
capabilities, e-commerce is a subset of an overall e-business strategy.
E-commerce seeks to add revenue streams using the World Wide Web or the
Internet to build and enhance relationships with clients and partners and to
improve efficiency using the Empty Vessel strategy. Often, e-commerce involves
the application of knowledge management systems.
E-business involves business processes
spanning the entire value chain: electronic purchasing and supply chain
management, processing orders electronically, handling customer service, and
cooperating with business partners. Special technical standards for e-business
facilitate the exchange of data between companies. E-business software
solutions allow the integration of intra and inter firm business processes.
E-business can be conducted using the Web, the Internet, intranets, extranets,
or some combination of these.
Basically,
electronic commerce (EC) is the process of buying, transferring, or exchanging
products, services, and/or information via computer networks, including the
internet. EC can also be benefited from many perspective including business
process, service, learning, collaborative, community. EC is often confused with
e-business.
FOCUS
OF INFORMATION TECHNOLOGY
Three primary processes are enhanced in IT:
1.
Production processes,
which include procurement, ordering and replenishment of stocks; processing of
payments; electronic links with suppliers; and production control processes,
among others;
2.
Customer-focused processes, which include promotional and marketing efforts,
selling over the Internet, processing of customers’ purchase orders and
Payments, and customer support, among others; and
3.
Internal management processes, which include employee services,
training, internal information-sharing, video-conferencing, and recruiting.
Electronic Applications enhance information flow between production and sales
forces To improve sales force productivity. Workgroup
communications and electronic publishing of internal business information are
likewise made more efficient.
The Role of IT
in Business-Led Data Governance
Despite companies now recognizing
the importance of their enterprise data, they still have a difficult time
effectively managing it as an asset. Some of those challenges arise from a lack
of business involvement and sponsorship, an inability to identify data owners
and encourage accountability, or a reluctance to share data. Although it is
imperative for business to lead and sponsor data governance, it is equally
important to align business and IT for organizations to fully benefit in a
significant and persistent way from data management.
The importance of aligning business and
IT is compounded by the trend to centralize information systems, resources and
integration points. Many organizations are moving to centralize IT and with
that recognize that data can also be managed centrally to achieve economies of
scale, improve productivity, and effectively manage information. Consequently,
the IT organization sees issues that span lines of business and geography,
including enterprise data issues. As such, IT may be the first to recognize and
often are the initial advocates of the need for data governance before the
business. For example, IT can identify where data issues start in a source
system and the changes that are made as data flows through different systems.
However, the impact of the changes to the data is not always obvious to IT, nor
is IT in a position to recommend changes to business processes to improve data
quality either at the source or over its lifecycle. Challenges arise when it is
time to assign resources to be accountable for data quality and fix data
issues, which is precisely when IT needs to transfer ownership of data
governance to the business while continuing with oversight and the essential
role IT plays in data governance success.
This places these questions into
context: What is the role of IT in business-led data governance? How can the IT
organization work with the business to ensure their needs are being met and the
data governance initiative is a success? In order to understand the role of the
IT organization in data governance, let’s first look at the goals and
objectives of the data governance organization.
Data Governance
Organization Goals
The
overarching goals of a data governance organization are to provide direction on
the capture, collection, security, transfer, quality and management of data
within the organization to:
Ensure
transparency
Organizations go about achieving
these goals and measuring and reporting results in different ways based on
their unique approach to data governance. What is evident is that the business
cannot achieve these goals without relying on and involving IT to deploy and
manage the enabling technology and tools. At the same time, business needs to
own the data governance program and the decisions concerning managing data as a
corporate asset. IT and business must both play their requisite roles in data
governance to avoid antagonistic or competitive impediments. Operating
principles should be developed that define how the business and IT should work
together in order to support collaboration. Moreover, the written guidelines
should be agreed upon and communicated across and made available throughout the
organization. While there are many ways to implement a data governance
organization, some common roles include the Steering Committee, Data Governance
Lead and the Data Governance Working Group – each comprised of representatives
from both business and IT. For example, as a cross-functional business and IT
team, the Data Governance Working Group are the
subject matter experts who drive data management and data quality strategy, and
execution for their respective subject and line of business areas.
The Role of IT
in Data Governance
The IT organization’s mandate is
to ensure that the future state of information and application architectures
meet the needs of the data governance organization and are aligned to business
goals and objectives. It ensures that the organization’s information
technologies sustain and extend the data governance organization’s strategies
and objectives while providing a consistent view of the end-to-end business
processes. To meet its mandate, the IT organization must provide leadership,
technical infrastructure and resources that collaborate with the business to
identify data issues, provide alternatives and
implement solutions. At a minimum, the IT organization should provide the
following resources to the data governance organization in order to meet
business stakeholder needs:
Data Custodians who work closely with
the data stewards and data owners to implement data governance policies and
data owner requirements, and who carry out the data delivery function The IT
organization is also responsible and accountable for providing technology and
technical infrastructure for the management, storage, access, security,
navigation, movement and transformation of data. In this way, it implements the
necessary systems to support and measure data governance requirements and data
business processes. It also ensures that the data governance strategy aligns
with the IT design methodology, development process methodology and best
practices. By working together with business data stewards, the IT organization
plays an important role in root cause analysis on data issues and building
remediation plans. It is the role of the IT organization to measure, monitor
and report on data quality and deliver stakeholder service based on service
level agreements.
In order to successfully provision these
services and support, the IT organization needs to understand why data
governance is important to each business stakeholder, what the benefits are and
how best to work together with the business. When the IT organization can
clearly articulate the benefits for each business function, sponsorship and
ownership is more easily achieved.The trend to
centralize IT compounds the importance of articulating the role of IT in
business-led data governance. Although IT may be the first to recognize and
advocate for data governance, challenges arise when ownership transfers to the
business. A comprehensive data governance strategy not only aligns business and
IT to address data issues but also defines data ownership and policies, data
quality processes, decision rights and escalation procedures. The IT
organization plays a critical role in enabling data governance and contributes
key resources to the data governance organization. The proper combination and
collaboration of business and IT resources, skill sets and leadership is
required to effectively carry out the data governance agenda.
IT SUBSETS AND
MODELS
Subsets
Applications
can be divided into three categories:
Internal
business systems:
Enterprise
communication and collaboration:
Electronic
Commerce -
business-to-business electronic commerce (B2B) or business-to-consumer
electronic commerce (b2c):
1.
Internet
shop
2.
Supply
chain management
3.
Online
marketing
4.
Offline
marketing
Models
When
organizations go online, they have to decide which e-business models best suit
their goals.[2] A business model is defined as the
organization of product, service and information flows, and the source of
revenues and benefits for suppliers and customers. The concept of e-business
model is the same but used in the online presence. The following is a list of
the currently most adopted e-business models such as:
Key
Security Concerns within E-Business
Common
Security Measures for E-Business Systems
CONCLUSION
The most common implementation
of e business is as an additional, or in some cases primary, storefront. By
selling products and services online, an e business is able to reach a much
wider consumer base than any traditional brick-and-mortar store could ever hope
for. This function of e business is referred to as ecommerce, and the terms are
occasionally used interchangeably. An e business may also use the Internet to
acquire wholesale products or supplies for in-house production. This facet of e
business is sometimes referred to as eprocurement,
and may offer businesses the opportunity to cut their costs dramatically. Even
many ebusinesses which operate without an electronic
storefront now use eprocurement as a way to better
track and manage their purchasing.E-business modeling is a concept that has several components and can
be designed based on different combinations of them. Furthermore, it is a
concept that is vulnerable to changes as it is associated with technology,
which is developing rapidly day by day. By con-ducting this research on 1) how
the companies are managing changes in a competitive environments by means of
adjusting their e-business models, and 2) if there are any compo-nent(s) of e-business model(s) that has more importance
than the others for the competi-tiveness of the
company, the thesis intends to define the change management procedures that the
organizations involved in e-business are using, and to compare the components
of the e-business models in order to find out if there is any component that is
more important than the others for the competitiveness of the organization.
REFERENCES
E-
References
1. http://www.b-eye-network.com/view/15165
2. http://www.essays.se/about/conclusion+of+e-business/
3. http://www.essays.se/essay/76e59b7c2f/
4. http://en.wikipedia.org/wiki/Electronic_business
5. http://www.information-management.com/issues/20010501/3337-1.html
6. http://searchcio.techtarget.com/definition/e-business
7. http://www.wisegeek.com/what-is-ebusiness.htm
8. http://www.zeromillion.com/business/it-in-business.html
Book References
1.
Beynon-Davies P. (2004).
E-Business. Palgrave, Basingstoke. ISBN 1-4039-1348-X
2.
E-commerce/Internet:
B2B:2B or Not 2B? Version 1.1, Goldman Sachs Investment Research (November 1999
and September 14, 1999 issues)
3.
Fickes, Michael. "B2B
security." Access Control & Security Systems Integration 43.10 (2000):
37-40. OmniFile Full Text Mega. Web. 30 Nov. 2010.
4.
Paul Timmers, (2000), Electronic Commerce - strategies &
models for business-to-business trading, pp.31, John Wiley & Sons, Ltd,
ISBN 0-471-72029-1
5.
University of
Pittsburgh, comp. e-Business Resource Group Security Guidelines. Publication. 5
August 2003.
6.
Westfall,
Joseph. "Privacy: Electronic Information and the Individual." Santa
Clara University. Markkula Center
for Applied Ethics, 2010. Web. 30 Nov. 2010.