Is Information Technology all its been hyped to be?
These days its hard to open a newspaper, watch TV or traverse the information superhighway without coming across an article or blog post praising IT and what a positive impact it has on business the world over or how information technology is literally capable of solving most of the problems known to man. However, despite the undeniable importance of IT in today’s world, sometimes the role (and importance) of IT seems to be overstated for different reasons and in a number of ways.
The rapid growth of IT and ICT use has led to a digital divide between those who have and those who do not have access to IT facilities and services especially in the poorest parts of the world. While the importance of IT is being discussed, it is worthwhile to realise that in some situations only a small section of the population can access this IT and thus the benefits of IT do not accrue to the majority.
Furthermore, many developing countries suffer from low levels of ICT readiness due to the underdevelopment of ICT infrastructure and the lack of a widespread skill base that would enable society to make an optimal use of technology. In countries like Uganda for example the cost of accessing these technologies is still high for a large share of the population. As a result, there are low ICT uptake rates in all sectors and areas, especially for individuals, and hence the transformational impacts of ICT are low.
Information technology does not automatically lead to greater profits or increased output. Companies around the world have spent billions of dollars on information technology, yet in most cases this investment has failed to produce any genuine competitive advantage. According to John Seely, “Extracting value from IT requires innovations in business practices. Firms or companies that mechanically insert IT into business without changing their practices to exploit new possibilities will only destroy IT’s economic value” .
Furthermore, as IT use becomes ubiquitous in most organisations and firms the advantages that accrue from using IT have started diminishing. As most software and hardware that previously gave those companies which owned it great advantage over those which did not becomes cheaper and easily accessible (sometimes freely through equally good open source alternatives in the case of software) the field has become more level and IT is becoming another ordinary commodity input like electricity. According to John Carr in his book Does IT Matter? “the rapidly increasing affordability of IT functionality has not only democratized the computer revolution, it has destroyed one of the most important potential barriers to competitors. Even the most cutting-edge IT capabilities quickly become available to all”. This holds especially true for countries like Uganda where few firms, have proprietary technology and all use off-the-shelf programmes and sometimes opensource alternatives (not to mention the pirated software that is everywhere).
Many times the start-up costs for investments in IT are so high and prohibitive. Organisations must examine the cost of installing the costly IT systems and of training employees in the unfamiliar technology. Although basic information technology systems may be user friendly, advanced programs still require formal instruction by an expert consultant. In addition to the start-up expenses, information technology systems are expensive to maintain. Systems malfunction, and when they do, businesses must engage skilled technicians to troubleshoot and make the necessary repairs. These expenses present a major disadvantage of information technology in business, particularly to businesses that are beginning to use the technology for the first time.
Furthermore, technology and software becomes obsolete so quickly in the IT sector that keeping abreast with the latest products and systems is difficult and many times costly. The organisation or an individual who is dependent on IT will have no choice but to continuously update at great cost (financially and in terms of training and operations disruption). Because of such associated issues these same companies and individuals are not that keen to invest heavily in IT and would prefer to use traditional (non-IT based) means of doing business because they feel they serve their purposes better and have less encumbrances associated with them in terms of long-term application and cost.
Reliance on IT brings with it some risks especially in the area of information security. Though information technology may have made communication quicker, easier and more convenient, it has also bought with it complications of privacy, computer security and fraud. The proliferation of IT has come with new risks and dangers for companies that hitherto did not exist. The connected nature of today’s firms means that one compromised computer or server can put the whole organisation’s information systems at risk. There are also risks of privacy for the individual users of IT. Identity theft and hacking have exposed thousands of people’s personal information with great financial and social consequences for the victims.
While information technology may have streamlined the business process it has also created job redundancies, downsizing and outsourcing. This means that a lot of lower and middle level jobs have been done away with causing more people to become unemployed. For example in many customer care departments of the major telecom companies most of the customer care inquiries are pushed to automated voice prompt services and people rarely need to speak to an actual human. This has led to major lay-offs because the extra customer care agents are superfluous.
It is evident that though IT has revolutionised the way people and organisations communicate and do business IT is still not always as important as we are sometimes led to believe. Increased IT use has brought with it increased security risks and changes in the workforce and its impact is minimal in areas with little or no access.
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| A graphical representation of the Digital Access Index. See how poorly Africa is doing (Source: International Telecommunications Union) |
The rapid growth of IT and ICT use has led to a digital divide between those who have and those who do not have access to IT facilities and services especially in the poorest parts of the world. While the importance of IT is being discussed, it is worthwhile to realise that in some situations only a small section of the population can access this IT and thus the benefits of IT do not accrue to the majority.
Furthermore, many developing countries suffer from low levels of ICT readiness due to the underdevelopment of ICT infrastructure and the lack of a widespread skill base that would enable society to make an optimal use of technology. In countries like Uganda for example the cost of accessing these technologies is still high for a large share of the population. As a result, there are low ICT uptake rates in all sectors and areas, especially for individuals, and hence the transformational impacts of ICT are low.
Information technology does not automatically lead to greater profits or increased output. Companies around the world have spent billions of dollars on information technology, yet in most cases this investment has failed to produce any genuine competitive advantage. According to John Seely, “Extracting value from IT requires innovations in business practices. Firms or companies that mechanically insert IT into business without changing their practices to exploit new possibilities will only destroy IT’s economic value” .
Furthermore, as IT use becomes ubiquitous in most organisations and firms the advantages that accrue from using IT have started diminishing. As most software and hardware that previously gave those companies which owned it great advantage over those which did not becomes cheaper and easily accessible (sometimes freely through equally good open source alternatives in the case of software) the field has become more level and IT is becoming another ordinary commodity input like electricity. According to John Carr in his book Does IT Matter? “the rapidly increasing affordability of IT functionality has not only democratized the computer revolution, it has destroyed one of the most important potential barriers to competitors. Even the most cutting-edge IT capabilities quickly become available to all”. This holds especially true for countries like Uganda where few firms, have proprietary technology and all use off-the-shelf programmes and sometimes opensource alternatives (not to mention the pirated software that is everywhere).
Many times the start-up costs for investments in IT are so high and prohibitive. Organisations must examine the cost of installing the costly IT systems and of training employees in the unfamiliar technology. Although basic information technology systems may be user friendly, advanced programs still require formal instruction by an expert consultant. In addition to the start-up expenses, information technology systems are expensive to maintain. Systems malfunction, and when they do, businesses must engage skilled technicians to troubleshoot and make the necessary repairs. These expenses present a major disadvantage of information technology in business, particularly to businesses that are beginning to use the technology for the first time.
Furthermore, technology and software becomes obsolete so quickly in the IT sector that keeping abreast with the latest products and systems is difficult and many times costly. The organisation or an individual who is dependent on IT will have no choice but to continuously update at great cost (financially and in terms of training and operations disruption). Because of such associated issues these same companies and individuals are not that keen to invest heavily in IT and would prefer to use traditional (non-IT based) means of doing business because they feel they serve their purposes better and have less encumbrances associated with them in terms of long-term application and cost.
Reliance on IT brings with it some risks especially in the area of information security. Though information technology may have made communication quicker, easier and more convenient, it has also bought with it complications of privacy, computer security and fraud. The proliferation of IT has come with new risks and dangers for companies that hitherto did not exist. The connected nature of today’s firms means that one compromised computer or server can put the whole organisation’s information systems at risk. There are also risks of privacy for the individual users of IT. Identity theft and hacking have exposed thousands of people’s personal information with great financial and social consequences for the victims.
While information technology may have streamlined the business process it has also created job redundancies, downsizing and outsourcing. This means that a lot of lower and middle level jobs have been done away with causing more people to become unemployed. For example in many customer care departments of the major telecom companies most of the customer care inquiries are pushed to automated voice prompt services and people rarely need to speak to an actual human. This has led to major lay-offs because the extra customer care agents are superfluous.
It is evident that though IT has revolutionised the way people and organisations communicate and do business IT is still not always as important as we are sometimes led to believe. Increased IT use has brought with it increased security risks and changes in the workforce and its impact is minimal in areas with little or no access.
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