Effect of Information Technology on Organizations

Information technology has a lot of bearing on how an organization runs. Information technology influences the way a company runs. An important aspect of information technology in organizations is its effect on production. If information technology is used in the appropriate manner, it increases the production of an organization. It promotes the reduction of human labor input in an organization hence saving on labor expenses. Increasing output and reducing input costs reduces the production cost of the organization, hence increasing the organization’s net profit.

Information technology also increases management efficiency in an organization. It allows the supervisors and management to maintain close contact between them and the employees. This ensures that accountability and responsibility is maintained. Information technology also helps to improve the quality and time for decisions. Using technology such as dashboards has helped organizations to make accurate and prompt analyses about the trends in the market. Information technology has also promoted accuracy in organization activities, for instance, use of computers in arithmetic.

Information Technology on Decision Making

Managers use the information to evaluate on the performance of the employees. This is by evaluating the surveys conducted by the organization on the market about customer relation. The managers also use the information to make decisions on investments. Information on the viability of a field of investment will enable the managers to make decisions on where to place the organizations investments. Managers also use the information to evaluate rewards and punishments on employees. By having information on the performance of employees, it will make it easy for them to review salaries and issue warnings and disciplinary measures.

Information is also used by the managers to make budgets. It also assists the managers to formulate policies and regulations of the organization.