IT Innovatin Improvement Reinvention

8/12/2019 IT Innovatin Improvement Reinvention

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The Information Technology and Businesses

In a modern world, it can be seen that the information technology (IT) has a great

influence business activities. Most of the business activities such marketing, human

resource, sales, production and others has influence with the advancement of IT.

Nowadays human activities become easier with the present of the information

technology. Information technology involve the use of hardware, software, networking

and data resource management in which all these components will facilitate individual

and organiation to perform the work and activities effectively. Think back a few

decades ago, there is no internet, email, mobile marketing, telecommuting and smart

phone. !verything needs to be done manually in which this method become barrier for

the business to respond with competitive market. "owever, with the advancement in

information technology, everything has changed. The advancement in IT has made the

business no longer focusing on fulfill customer satisfaction but the business has

changed their focus on how to make customer delightful with product and services

provided by the business. Now with the information technology communications occur

immediately and instantaneous.

The use of IT allows large amounts of information pass through email and

internet at anytime and anywhere. Innovations in technology have enhanced

companies operations of all sies and facilitate the business to move from small local

businesses into global businesses (#manda, n.d) #ccording to $arrell (%&&'), they

suggest that the role of IT is to lead and drive the formulation of business strategy.

ther than that, they agree IT can be seen as a tool to achieve growth and develop

sustains competitive advantage to the organiation in order to compete in highly

competitive market. Ingram (%&&) stated that information technology is a new

phenomenon that give dramatically changed in the daily lives of individuals and

business in every part of the world. In addition, information technology has grown andspread out through the business world. Information technology has give affect on how

companies market their products and also facilitate people to communicate and

accomplish their *ob in modern organiations. $rom day to day the changes in

information technology such software, hardware and other devices has continually

changing the face of business in almost every way (Ingram %&&).

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The Information Technology and Business Improvement

IT Helps to Reduce Cost of doing Business

Initial implementations of information technology in business almost always focus

on cost reduction, it is the benefit about IT that will come across in our mind as the first

ideas when talk about on how IT can help organiation to improve their businesses.

Most of the ob*ective of the businesses to implement the use of IT is to automate

processes in order to reduce cost by replacing large numbers of people with a few

computers ("arwell, %&&-). educed e/pense in performing the businesses is one of

the reasons that most companies have already automated the obvious areas for

savings long ago. rganiation that still operates their businesses manually will invest

high cost as compared to organiation that automated most of their operations. It is

because process or operation that done manually re0uire a large number of workers to

perform it if the work is complicated and involve a lot of process. rganiation that use

a few number of workers to operate their business will involve high cost such payment

of the salary, cost of training to increase employee1s skills and ability, recruitment cost

to hired new employees and others related cost. #s compared with automated process

which the operation has been done by the machine or automated system such

computer are not involve high cost because computer not re0uired training to perform

the work, everything has been set up in the computer.

#ccording to 12rien and Marakas (%&&3), organiation can arise it cost savings

because of the application or process that use the information technology such internet

and internetbased technologies in which it seem less e/pensive to develop, maintain

and operate than traditional systems. 2esides for certain types of transactions, the

transaction cost savings are more to online transaction compared to traditional. $or

instance, 12rien and Marakas (%&&3) istated in their book in which airline booking is

about & percent less if booking reservation has been done through online or internet as

compared the same booking reservation has been done over the telephone. It is same

with common online banking transaction such check payment, make payment that cost

from -& to & percent less than traditional practices. Therefore if the business is still not

competitive because of a higher than normal e/pense level, then the aim to reduce the

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e/pense or the cost can be the most important way that IT can contribute to the

business ("arwell, %&&-).

IT Helps Business to Increase Customer Loyalty and Retention

4ustomer is a significance element for every business to e/ist. Most of the goaland ob*ective of the business is to fulfill their customer needs to ensure that the

customers are satisfied with the product and services provided by the business. 5o it is

important for the organiation or business to create and maintain a good relationship

with the customers to ensure that the customer is loyal to their product and services and

at the same time will help the organiation to increase business profitability. The

businesses that focus on how to increase customer loyalty and retention need to

implement customer relationship management (4M) strategy. #ccording to Ngai

(%&&-), 4M ob*ective is to build the relationship in order to affect customer ac0uisition,

loyalty, retention and profitability.

The significance of information technology and its application in 4M is in the

increased use of these technologies to establish and develop loyalty and retention

among e/isting customers. The effective use of 4M system can facilitate organiation

to develop relationshipbuilding activities and at the same time it will contribute to the

organiation profitability (6il*oen, 2ennett, 2erndt 7 8yl, %&&-). rganiation and

businesses that use 4M strategy are able to identified customers preference and

interest by the data and information that they retrieved from the 4M system, thus it will

assist the organiation to create product or services that fulfill customer needs. 9aw,

9au 7 :ong (%&&') identified that 4M as a process of storing and analying large

amounts of data that give organiation and businesses the view about customer

behavior. The data that has been analyed enables the businesses to treat customer

differently based on the e/hibited behavior. #non (%&&%) claimed that to build the

relationship with customers re0uires data on the customer. The data that has been use

must correct, complete, current and uni0ue to avoid the mistake in delivering the

product and services to the customer. There is some organiations are not ready for

4M implementation because they do not have good enough data. # research

conducted in the ;< in %&&& identified that organiation that consist of update, clean

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types of innovation relate with a new products, new services, material, new processes

and new organiational forms. In order to ensure innovation take place in businesses,

the appropriate use of information technology as a significance elements for attaining a

competitive advantage over other businesses. Most of the leading firms successful in

implementing innovation because the present of information technology that enables

them to respond with the rapid changes in a modern world.

Innovation is closely related with business performance. The first view shows

that the production of new products or processes strengthens the competitive position of

businesses to its competitor. :hile the second view argues that the process of

innovation transforms a firm fundamentally by enhancing businesses internal

capabilities, making it more fle/ible and adaptable to market pressures than non

innovating firms (Neely and "ii, +3). =roduction of new product wills successful if the

businesses able to give innovation ideas to the new product by using the advancement

of information technology. $or instance, telecommunication businesses are competing

with each other in order to produce mobile phone with the high technology application

and function. 2asically, most of the telecommunication businesses produce the same

product to the customer which is mobile phone, but what make them different with other

rivals are the innovation ideas that take place in designing and creating new model of

smart phone. 2attle of smart phone innovation has take place in many feature, for

e/ample the innovation ideas of smart phone with the water resistant and dust proof

features (Matt, %&+>).

In order to create this features, telecommunication businesses need to ensure

that they have all the advance and update technology to enable them create smart

phone with the attractive features that will capture customer interest to get the product.

:ithout the present of advancement of information technology, the telecommunication

businesses are never able to compete among themselves. 2esides to add more on

features and attributes, other reason IT take place in product innovation of businesses

because to respond the change in customer re0uirement, to enhance convenience to

use in term of ergonomic consideration, increasing product sale ability, improving

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product reliability and most important thing is to gain competitive edge among

competitors.

ther than product innovation, IT also gives affect in process innovation. #

process is combination of technologies, skills and facilities that are used to produce

product or provide services. =rocess usually involves a set of tasks that need to be

performed, a flow of material and information that connect the task and also storage of

material and information (6i*ay, %&+'). The process will transform input into output, thus

to get the valuable output organiation need to encourage process innovation to ensure

the output that has been produced will facilitate businesses to make a good business

decision.

$igure +F $low of process

#s refer to figure +, process will transform input into output. 2ased on the figure,

customer data one of the input that businesses may have. The customer data at input

stage is raw data, which is the data is not clean and organiation need to analyed the

data to get the accurate data base on the business process that businesses practices.

$or e/ample, if the businesses want to innovate a new approach in customer relation

management (4M), the businesses must apply an advance technology in 4M

strategy such e4M in which it will help organiation to get accurate and valuable

information as an output thus this information will influence businesses to make a good

business decision.

Information Technology and Business Reinvention

einventing has become one of the important elements for the company to

upgrade their Information Technology (IT) aspect. This element will help to redesign the

company strategy and process in IT to suit with the environment and availability of

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technology that re0uired by customers and suppliers. $rom /ford Aictionary, the

definition of reinvent is to present something in a new form or with a new image.

Meaning that, reinventing the IT is company need to restructure and redesign the

business process or system in line with the advance of technology and the needs of

customers.

$rom Madnick (+'), today1s business is influence by the increasing of

geographic scope because of globaliation and competition, pressure of productivity

and the rapid change of environment. This will lead to company to restrict the flow of

company with the nowadays function in order to move along with the update. $or

e/ample, the top management may need to restructure the organiation from the

company which practices the centralie organiation where one department will do all

the function while others *ust wait for the report to the organiation which is more

specialie where each department will do its specific task and function and the

information will be e/change to other office through telecommunication and IT function.

2randauet. al. (+) said that there are three ma*or phases in changing the

application of ITG the initial phase, reengineering phase and reinvention phase. In the

case of ?T! Network 4ompany, each phase illustrate the way it connected both from

business and IT perspective. In the initial phase, IT will serve a business support

function, but it did not give significant effect to the business as whole. Ne/t is that IT

allowed the reengineering of the core business processes and finally IT enable the

company to reinventing the telecommunication business.

"ence, reinvention signifies the impact of new technology in order for company

to redefining the business, for telecommunication company it will include the emerging

of Internet applications and services where a lot of company nowadays have official

website that connect customer and employee through virtual ways. That is whyreinventing the telecommunication process will help in success to business (2randau et.

al., +). 2randau also said that IT should be the prime agent for the transformation of

company. einvention also helps the company to overcome the competitive pressure,

competitive technologies and the mergers and divestitures of company. It also will

change the way company do its business, this is because of changes in IT and

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telecommunication will lead and force the company to follow and change the definition

of the business.

4ompany will normally do the reinvention in order to redesign its business

process with the need of customer and the availability of technology in the company.

einventing meaning offering new process to the company and in order to do that, the

company has to combine old and new technology in the process which we call as the

integration of the technology. There are some characteristic of integration technology

which is the technologyenable, continuous rapid change and innovation, applies in all

functional areas and industries, it re0uires crossfunctional perspective, infrastructure

focused and force for enterprisewide transformation (Madnick, +'). The first

characteristic is the technologyenabled where the company is focusing on new

opportunity to be provided by new technology especially with more intelligent and easy

touse shared databases and communication networks. 5o Madnick (+') said that in

order to do change the company must be wellversed in these new technologies.

Ne/t is the continuous rapid change and innovation of informationbased

technologies which automobile and railroad also making change in technologies like the

informationbased technologies such as portable computers, highperformance

communication networks and great database systems are now change in 0uick rate. 5o

if the company did not fully understand or know it e/istence then the company will face

great problem later on. This function must be adapt into the environment of business to

employee be able to understand the need and way to gain benefits from it. Then in

order to reinventing the business in IT the company must also redesign the change and

apply in in all functional areas. The change in IT must be communicate and used by all

department in the company so that the flow can be manage and run smoothly in all

department (Madnick, +').

#fter that the company must focus on the infrastructure because it plays very

important aspect where the need for base capability in installing the new process and

system is important. It will make sure whether the system or process suit with the

company or not. If the company are focusing in the traditional information system then

the company had to change the way it do the business from traditional into the modern


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process in order to suit the infrastructure with the new system (Madnick, +'). #s said

by Madnick (+') the enterprisewide transformation where the technologies will only

be effective if the system is appropriate with the organiation and vice versa. 5o in

order to make reinvention success the company must help the organiation to redefine

its goals and necessary changes must be done to attain the goals.

Conclusion

#s a conclusion, information technology (IT) is no longer about supporting or

automating a business but it is more than that. In the modern world and highly

competitive market, organiational leader need to look forward to encourage the use of

IT because it enable business growth and help businesses to gain competitive

advantage. Today, most of the business visions are changing due to high impact of IT.

IT assisted business to grow, reduce costs and increase return on investment. 2ased

on the study that has been conducted by IT practitioner believes that there is a lot

benefits derive from the use of IT in businesses. ther than help organiation to

improve business productivity, IT also as key element for innovation and reinvention

take place in businesses. 4urrently, large companies focusing on establish research

teams and continuously innovating and reinventing their business models to attain

greater benefits of their business.

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IT Innovatin Improvement Reinvention