INTRODUCTION OF INFORMATION AND COMMUNICATIONS TECHNOLOGY- EFFECTS OF ICT ON ORGANIZATIONS

POSITIVE EFFECT OF ICT ON ORGANIZATIONS

There are three main areas in which organizations are affected by the use of ICT, communications, information management, and security. The three areas have considerable overlap.
▪ Communication: By using ICT has brought a number of benefits to organizations, such as: Cost savings by using e.g. VoIP instead of normal telephone, email / messaging instead of post, video conferencing instead of traveling to meetings, e-commerce web sites instead of sales catalogues. Access to larger, even worldwide, markets. Web sites can be seen from all parts of the world and orders can be taken wherever there is a compatible banking system to process payments, e.g. credit / debit card, Pay-Pal, bank transfer facility. Web sites also have 24 hours opening and are available every day of the year. Flexible response. Organizations with good communications can respond to changes quickly. This may mean better customer relations, an improved supply chain for goods and services, faster development of new products to meet a new opportunity, etc.
▪ Information management: Organizations can benefit from using ICT for information management. e.g. Data mining of customer information to produce lists for targeted advertising. Improved stock control, resulting in less wastage, better cash flow, etc. Mangers are better informed and will have more reliable and up-to-date information on which to base their decisions.
▪ Security: Although the use of ICT can bring its own security issues, see next section, it can also solve or reduce some security problems, e.g. Encryption methods can keep data safe from unauthorized people, both while it is being stored or while it is being sent electronically. This is important for reasons such as data protection legislation or commercial secrecy. ICT enables physical security systems such as fingerprint, iris or facial recognition.

NEGATIVE IMPACTS OF ICT ON ORGANIZATIONS

Cost: the cost of using ICT may cause a number of problems for organizations. A lot of ICT hardware and software is expensive, both to purchase and to maintain. An ICT system usually requires specialist staff to run it and there is also the challenge of keeping up with ever-changing technology. These extra costs should be offset by the positive effects of using ICT, but if an organization gets its cost-benefit analysis wrong it may lose money.

Competition: this is usually thought of as being a good thing, but for some organizations being exposed to greater competition can be a problem. If the organization is competing for customers donations, or other means of funding nationally or even internationally, they may lose out to other organizations that can offer the same service for less money.

Security: this is always a problem for any organization that uses ICT. Data must be kept secure, Internet connections must be protected from attack, new viruses and other forms of malware are released nearly every day. Organizations will usually have legal obligations to protect data such as customer information. Even if the organization does not have to comply with a specific data protection law it will usually be in the organization’s interest to protect data from rivals.