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This presentation shows how emergence of IT has changed the way businesses are managed. This is more focussed on Financial Management, though other areas of management are also touched upon.
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CORRELATION BETWEEN MODERN MANAGEMENT PRACTICES AND IT
TRENDS
1
MEANING OF MANAGEMENT & INFORMATION TECHNOLOGY
Management: Management is the coordination of all
resources through the process of planning, organizing, directing and controlling in order to attain stated objectives
Information Technology: IT deals with the use of electronic computers
and computer software to convert, store, protect, process, transmit, and securely retrieve information
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HOW IT INFLUENCES MODERN BUSINESSES
Hard to imagine running a business without Information Technology!
Businesses have gone global, beyond the national boundaries
Off shoring / outsourcing reduces the cost and allows management to focus on core competencies
IT facilitates better control over off-site locations Productivity has soared with the advent of IT Helps faster and smarter decision making Helps secure critical business information 3
IT HAS CHANGED THE FACE OF BUSINESS
Operating expenses have gone down, amount spent on technology has increased
Helped in understanding customer better
Increase in customer, investor as well as
supplier base
Need for IT skills in lower levels of
organization
IT has taken a toll on employee count4
NEW TRENDS IN IT
Cloud Computing
Software as a Service (SaaS)
Virtualization
Social Networking
Use of Digital Devices
Information Economy
5
IMPACT OF IT ON FINANCIAL MANAGEMENT
Shift from physical books to Tally, and Tally to ERP
Centralized global accounting and financial management
Smart business decision making possible with the help of Data Analytics
Outsourcing of back-office functions, viz. Accounts Payables and Receivables, Procurement, Payroll etc.
Better financial control by comparing budgets vs. actuals
Anytime anywhere availability of information6
ROLE OF IT IN CORPORATE FINANCE FUNCTIONS
Different functions of Corporate Finance:
– Financial and Business Planning
– Procure to Pay
– Accounting to Close
– Order to Cash
– Payroll
– Tax Planning and compliance
– Audit: Internal , Statutory, Security
– Treasury7
HOW IT HAS TRANSFORMED THE FINANCIAL WORLD
Internet Banking has shortened the bank queues
Choice of investing in shares of Reliance or AT&T
Historical data available on fingertips
Investors make more informed decisions
Globalization of financial services
IT has led to financial innovation, viz. derivatives,
etc
Reduction in time taken for financial transactions 8
IMPACT OF IT ON HUMAN RESOURCE MANAGEMENT
Use of IT from Recruit to Retire Prospective candidates being reached
through internet instead of newspaper
Performance management made easy History of an employee at the fingertips of
the manager Informed decisions could be taken regarding
appraisals, hikes, etc
9
IMPACT OF IT ON SALES & MARKETING
Whole world has become a prospective
market IT comes into picture right from pitching
clients to after sale services Internet emerged as the best medium for
advertisement
E Commerce facilitates the final transaction Online after sales service through “Webex”
sessions Cloud computing making its mark in sales &
marketing too. Eg: www.salesforce.com
10
MANAGING IT SYSTEMS IN MODERN BUSINESS
Management of IT Systems itself has changed
due to the use of IT in Businesses
Critical to keep IT infra up & running 24 X 7
Vital to control IT budget & resources
Outsourcing IT maintenance solves the purpose
BMC’s belief: “Business Runs on IT, IT runs on
BMC Software”
Other major players: IBM, HP, CA 11
IT HAS MADE MANAGER’S LIFE SIMPLE
Mobile revolution has impacted daily life Data available at any point of time, as and
when required
Stay connected with internet 24*7
Decision making made easier
Option to work from remote locations Audio & Video Conferencing made virtual
meetings possible
12
DOES IT MATTER?
“ When a resource becomes essential to competition but inconsequential to strategy, the risks it (its absence) creates become more important than the advantages it (its presence) provides. ”
13
- Nicholas G. Carr Harvard Business Review
THREATS OF INCREASING IT DEPENDENCE
Data theft is the biggest risk Easier to hack into a computer system than into a
human brain System crash : a normal phenomenon. So backup
becomes inevitable Privacy can be an issue in case of Cloud Computing
& Virtualization Cyber Laws in India are still ineffective Over-exposure to technology may harm employees’
health
14
IT CAN’T SUBSTITUTE HUMAN ELEMENT
Human intelligence is required for holistic analysis
Some business decisions have to be taken based on intuition
Computers don’t have emotions, managers
have it
Businesses can run without IT, not without
men
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