The Role of Information Technology in Business

The role of information technology systems in a business environment can be classified into four broad categories. These categories include function performance, communication through networking, management and enterprise roles.

Information technology provides commercial and industrial systems for businesses. These systems enable businesses to function effectively and efficiently.

Function IT Systems

Function IT systems are applications that allow individuals to function effectively in the workplace. Examples of common IT systems that enhance workplace functions are word processor applications, spreadsheet applications, statistical analysis software and computer aided design (CAD) programs. Employees can work and perform their task individually or collectively using these specialized software technologies.

Network IT Systems

Network IT systems allow effective communication within and outside an organisation. Examples range from simple e-mail (electronic mail) to blogs, wiki sites, IM (instant messaging) and electronic conferencing systems. These types of technologies promote interaction and collaboration among working groups and also facilitate quick information flow at all levels.

Management IT systems

Management IT systems(MITS) can be defined as planned applications that are designed to process data and transform the processed data into useful information for management decision making.

It should be noted that Management Information systems (MIS) are subsets of Enterprise IT systems (this is explained later on in this article). However, because of the vital role MIS play in a business environment, it is considered here as a major information technology for businesses.

In a typical scenario, management operates at different levels and so it is possible to apply management information systems at these varied levels.

Basic examples of management information systems are human resources management systems, financial management information systems and marketing management information systems.

Enterprise IT Systems

Enterprise IT systems are technologies designed to integrate and manage entire business processes for large organisations. Typically, enterprise application software is hosted on large servers over a computer network. Transmission of information can either be internal or external.

Examples of enterprise information systems may be accounting software, health care specific software or Electronic Data Interchange (EDI). Another good example of software application within this category is Customer relationship management software (CRM).

The role of Information technology in business is wide and varied. It can be said that IT provides a huge range of capabilities that enhance management performance at all levels. It is therefore important to understand the four major categories of IT systems and their functions and roles in a business environment.

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