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The Impact of IT Systems on Efficiency & Productivity

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  • 0:00 The Impact of IT Systems
  • 1:01 Business Intelligence
  • 2:26 Process Automation
  • 3:39 Communications
  • 4:53 Lesson Summary
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Lesson Transcript
Instructor: James Kuhn

Jim has taught adults for more than 20 years and has a Masters Degree in Christian Leadership.

Information technology (IT) is a field that has grown rapidly since its introduction in the 1980s. This lesson will discuss the impact that IT systems have had on efficiency and productivity and highlight the primary areas of influence.

The Impact of IT Systems

A bank deposit can take place without even going near a brick and mortar facility. Real-time meetings can take place with participants around the world, without any of them leaving their own offices or homes. Business leaders have instantaneous access to performance metrics at the click of a button. Each of these instances displays the monumental impact that information technology systems (IT systems) are having in our work and home lives.

Information technology (IT), when combined with an activity that supports an output, becomes an IT system. The interaction could be with a human, with a process, or simply with data. The output can be a business decision, a process step, or even a completed product. No matter the output, IT systems influence the efficiency and productivity of the interaction. The primary areas of major productivity and efficiency are in:

  • Business Intelligence
  • Process Automation
  • Communications

Business Intelligence

Business intelligence (BI) is a consolidated term that incorporates the areas of reporting, analytics, and operational performance, among others. The entire scope of this area is truly the result of advances in IT systems and is expected to continue its impact. The areas of greatest influence within BI include timeliness, metrics, and decision-making.

Even the most basic businesses have almost instant access to the most critical information needed to operate at the highest efficiency. Rather than wait for month-end statements, or rely upon a landline phone call, most choose to perform both routine and complex financial transactions online, in real time. IT systems throughout the transaction make this not only possible but also preferred. Further, internal IT systems can provide up-to-the-minute results on operations, profitability, and even client satisfaction. The ability to acquire and analyze metrics on a current basis has led to sizable efficacy gains in most businesses.

Plato is said to have remarked, 'A good decision is based on knowledge and not numbers.' Such wisdom still applies today and is enhanced by IT systems. With nearly unlimited access to information, automated analysis tools, and evaluating options, the decision-making process has never been better thanks to IT systems. While no technology can assure a good decision, it has allowed for improved knowledge on which to base those decisions.

Process Automation

For nearly a century, businesses have used process automation to improve operations beyond that which could be obtained by human capability alone. Through the use of IT systems, significant gains in have been achieved in quality, production, and cost savings.

Most modern production lines have implemented infrared scanners, high-speed digital imaging, and other technology as critical tools in their IT systems. This efficiency results in reduced errors and increased accuracy, far above what could be done by manual resources alone. Because of the higher quality created through automation, the throughput or output capacity, can also be increased, creating further productivity gains.

Ultimately, the principle focus of automation has been to reduce costs and, through the implementation of IT, it has become a significant reality. While the primary advantage has been a reduction in human labor costs, there has also been huge reduction in energy and material costs seen across virtually every industry sector. Think of all the monthly invoices that are no longer sent through traditional mail services, reducing needs for lumber (pulp), printing, and delivery expenses. Thus, IT systems continue to provide sizable productivity and efficiency gains through process automation.

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