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The Impact Of Information Technology On The Performance Of An Organisation

CHAPTER ONE

INTRODUCTION

1.0 BACKGROUND OF THE STUDY

Over the years, the aim of every organization has been to increase the overall performance of its organization. Information technology has received a great deal of the attention not only from the academic field but also from the business world because it is believed to be the main determinant of the increase in an organization’s performance and productivity. It is widely believed that information technology helps an organization to reduce costs and increase capabilities. Information technology (IT) is used interchangeable with information and communication technology.

Information technology which is commonly called with its acronym “IT” which is often interchangeable with information and communication technology (ICT). Information technology has penetrated the office and services environment since the 1978. The shift from mainframe to Personal computer based technology is breaking down communication barriers between employees and customers. Now managers and employees from various departments are designing and controlling complex business information systems.

Organizations view investments in information technology (IT) as a way to combat competition by improving productivity, profitability, and quality of operations. The Department of Commerce estimates that about 46% of all equipment spending in the United States is in IT equipment and software (U.S. Department of Commerce 1998) and in spite of economic slowdown, spending by the IT sector is expected to increase (U.S. Department of Commerce 2001). With increased investments in technology comes the responsibility to provide economic justification.

Today, more than ever, IT executives encounter the justification issue due to senior management’s insistence that the investment be properly utilized. In recent years, a surge in the number of doing so, the IT pay- off literature has examined the relationship between investments in IT capital and labor and their effect on organizational performance. However, largely due to the nature of the research designs employed, this stream of research will definitively attribute the effects of usage and impact of individual technologies on organizational performance.

There is some degree of theoretical consensus about the existence of a positive relationship between information technology and performance. In particular, some researchers believe information technology to have yielded positive results such as higher productivity, more satisfaction for the customers, more value creation etc. while other researchers believe information technology to have yielded negative or no result. The use of a particular technology might vary across organizations and also between different time periods for the same organization.

IT is widely used to share information and coordinate business resources such as physical resources, managerial expertise, technical knowledge, and market information across multiple markets. IT is widely used to share information and coordinate business resources such as physical resources, managerial expertise, technical knowledge, and market information across multiple markets.

The evolution of Information Technology (IT) was traced back to the age of Abacus Computer by the Egyptians around, 3,000 BC.  It was used for the systematic calculation of the arithmetic and numeric operations.  At the sometime “the Boroughs Machine” has been developed to hold business information. Later, Charles Babbage developed a machine known as “Analog Computer”, this device have provision for input data, storing information, performing arithmetic operations and printing out results.

In 1970’s, the first small computers known as “minis” and “Midis” were available which used floppy disks, Unix for storage of information and display of information that has been stored in the system.  These mini Computers include IBM PC, Electric typewriter, word processor and Apple computers.  This information technology development had improved communication, unlike before whereby information were delivered through post office, which consumed a lot of time.  But today with aid of information technology you can reach somebody anywhere in a matter of a minute without much stress.

In those days, there was nothing like inter-com telephones that can linked various units or departments in an organization in order to save personal secretaries time and energy spent in running errands within the organization.  As against the traditional office, the modern office has a lot of activities to perform with help of modern office machines.

Moreover, information technology gadgets act as an important tool in secretary’s job and minimize likely fraud, which could arise from numerous mathematical calculations done in the office and to a greater output than that of a secretary using manual equipment. This development in Information technology has improved the effectiveness of secretaries and other technology users in attaining their objectives in various organizations.

This research work therefore studies the impact of information technology on the performance of an organization.

1.2     STATEMENT OF THE PROBLEM      

Organizations have strong belief that the use of information technology either dependently or independently increases the performance of an organization which have led to controversies between them and those that believe not. Opinions that a world with technology has led and can lead to the greatest achievement of every organization.

In this light, studies have been made to know if an organization’s performance is affected by information technology. A clear examination and evaluation between information technology and the performance of an organization will be made.

Therefore, this study seeks to analyze this relationship and examine the extent to which information technology affects performance of an organization.

1.3     RESEARCH QUESTIONS

The research of this study will however answer the following research questions: Continue Reading….

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