How Can Information Technology Improve Productivity?

By Edward Mercer

Information technology includes everything from cell phones and computers to local area networks.
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In a highly technological and rapidly evolving world and workplace, technological systems and devices play a profound role in determining how information is managed. Information technology – generally applied to describe the set of machines and telecommunication networks used to transfer and manipulate data – is widely used in business to increase productivity through process improvement, product innovation and new worker skills. Implementing new information technology in a business is not without its risks, but, properly applied, it can have a considerable positive impact on productivity.

Process Improvement

Systems like digital file transfer services, email and Internet calling serve to accelerate data transfer and communication while reducing costs. To use email as an example, businesses can transfer data and send messages to suppliers and clients in seconds with the click of a button, as opposed to systems like traditional mail and face-to-face communication that require longer travel times and larger investments. In communication, the productivity benefits of IT implementation are two-fold, both reducing the time it takes to access or transfer data and increasing the productivity of investments in communication through lower costs.

Product Innovation

In a market shaped by technology, consumers tend to find information about products and make purchases through IT platforms like online shopping sites, in addition to demanding certain technological features from the products they purchase. A consumer looking for a digital camera, for example, could be swayed by features like online photo sharing or storage included in the product. Because these digital add-ons tend to come at a lower price point than physical extras but can still sway consumer behavior, investments in these areas can be highly profitable.

Worker Skills

Information technology can simplify how customers interact with customer support services. Online help and support chat services, for example, put an enormous amount of searchable information at the consumer's fingertips, reducing the probability that a customer will need to speak via telephone to a representative to solve a problem. This allows workers to communicate with customers through more efficient platforms. The result is an increase in productivity in employee hours while still maintaining high levels of customer satisfaction.

Potential Risks

IT implementation can be a valuable tool for increasing workplace productivity, but without a careful selection of the right technologies for a specific industry and comprehensive employee training, it can also serve to reduce productivity, profitability and employee satisfaction. Between new devices and network services, IT systems can often be a considerable business investment, cutting into profits if they don't pay for themselves over their lifetime. The return on investment will depend on whether the technologies implemented are right for a given business' needs and how prepared employees are to use them.