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Information Technology in Business: Benefits & Limitations

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  • 0:02 Information Technology…
  • 0:59 Benefits of IT
  • 3:14 Limitations of IT
  • 5:22 Lesson Summary
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Lesson Transcript
Instructor: Rana Abourizk

Rana has a Masters Degree in Business Administration and is pursuing a Doctorial Degree. She has been teaching online for over a year. She has a strong business background.

As technology continues to develop, the uses of information technology in business increase. IT has made it possible for many businesses worldwide to run successfully. Today, we'll discuss its benefits and its potential limitations.

Information Technology in Business

Dan is the owner of a tutoring company. His company operates worldwide, mainly online. He uses information technology every day. Information technology, also called IT, is the use of computer hardware and software to manage data.

Dan has software that keeps track of all new students and different software that protects all of his information. Other software helps him store all of his important files. Dan relies on his smartphone and computer to communicate with tutors worldwide using email, virtual classroom, or chat. He occasionally holds meetings using a video conferencing system. Dan uses software that records classes if the tutor uses any system other than the virtual classroom.

For Dan, information technology is essential to run his business. He created many social networking sites in order to find students and connect with them. He was able to connect to companies that believe in educational advancement and offer them special rates for their employees.

Benefits of IT

IT has many benefits for Dan and other business people. It helps people connect virtually from a computer, smartphone, or any other type of device that has Internet access. Business people can talk to foreign partners using video conferencing, messenger, email, and a shared network. Businesses can promote diversity by hiring people from all over the world. This allows employees to become more aware of other cultures and backgrounds.

Next, IT opens doors for businesses to work mostly virtual. Experienced workers can educate others from other parts of the world. They can work together to tackle any project. Employees are empowered to make choices. This gives them more freedom to express their ideas and make the needed fixes when a problem arises. Employees also learn to collaborate with one another and build long-lasting partnerships and strong work relationships. This type of atmosphere creates a boundary-less organization.

Additionally, IT helps businesses work together, or network. Software programs and hardware devices make it possible to connect to many different companies without driving or flying to their actual locations. IT has made it possible for businesses to have a business-to-business, or B2B, marketplace where they can market themselves. Businesses can build their brand using this type of IT program.

Many businesses rely on IT for storage programs and security programs. For instance, a company could use a storage program to keep its financial information. It could have a security system to keep all customer information protected.

Some businesses also have employees work multiple jobs. For example, a manager could be in charge of two departments as well as another position. This is known as evening out the ranks in the business, or the deletion or combination of positions and departments. This helps the company save money and time. It also gives customers a faster way to contact the right person when they need assistance.

Many businesses use software programs that track all of their business drivers, or the important parts that help the business succeed. For example, a sales firm can use a software like the balanced scorecard, which provides all the key drivers for the business. The employees just check their performance on the balanced scorecard, change or adjust their behaviors, and work to reach their goals.

Limitations of IT

A major limitation of IT is hacking, or stealing, a business' information. Even with a security program, it is possible that hackers may try to take, change, or sell information. For instance, a woman who works at a customer service center sometimes uses her personal laptop for work. One day, her laptop is stolen. All the information in her laptop is now vulnerable to hackers.

In another example, an employee receives what appears to be a company email. The email looks fine - it contains the company's information and business logo - but it really isn't. The email is a fake, sent to steal company information. It might ask for a customer's account number and phone number. This type of hacking is called phishing.

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