Digital transformation affects how businesses are conducted (Fichman, 2014). The advancement in information technology, in particular, has caused organizations to make numerous alterations to their systems. This transformation has affected our communication and our daily activities (Laudon, 2016). Hal Varian in one of his famous quotes says "It isn't that information is exploding, but accessibility is." He explains that more accessibility brought about by information technology tends to portray the deceiving picture that there is more information today than there was yesterday. This digital era is forcing organizations to introduce new information technology methods which include shifting from traditional information technology to cloud computing (Ransome, 2016). Cloud computing is a paradigm of information technology that allows the delivery of computer services such as analytics, software, and storage over the internet (Coronel, 2016). Cloud computing can be used to store company data, including emails, contacts, media files and crucial documents(Sheikhi, 2016).
The information technology sector is arguably the fastest growing sector with regular innovations causing companies having to adjust by making changes and introducing new systems in place (Nambisan, 2015). These new systems not only to keep up with the demand of the advancement in technology but also to help the organizations to grow and develop by increasing their profits. Managers don't just implement an information technology model that is available to them; they choose a model that has lower costs of implementation, operation, and maintenance while increasing the organization's revenue (Goetsch, 2004). Knowledge of the economics of these information technology models is therefore crucial to ensure that the model that is implemented in an organization and can promote the growth and development of that particular firm. It is worth noting that one of the main factors affecting cloud computing is the costs associated with the value and revenue provided (Rittinghouse, 2016). These two factors can be directly related to the field of economics, and hence knowledge of economics is required in running the information technology industry, especially in this ever-increasing digital era(WarehamVarian, 2016). It can, therefore, be noted that economics have a significant duty in identifying the success or the challenges of companies that have embraced the changes in information technology (Thorne, 2017). The economics of information technology has changed continuously, hence creating a revolution in how businesses function (Jeston, 2014; Nicholas, 2017).
As explained above, the rise of the digital era has brought about technological changes in organizations. Information technology has been a sector that has been widely affected since it is only fair for the organizations to change the manner of information handling just like people have done. Managers need to install management information systems that will increase the revenue of the firm and lower the costs associated with the workforce. This project proposal research aims to identify the impact that the information technology systems in an organization have on the profits of the organization. The costs of running the system over a specific period, maintenance costs also included, will also be evaluated. These figures will then be analyzed accordingly to come up with the profits of a specific organization. This project proposal also aims to identify if the type of information technology model in an organization determines the success of that business.
The significance of this study is to enable managers of organizations to understand the economics of information technology, especially in this digital era. This study is supposed to provide different managers of different firms a clear picture of how the different models of information technology installed in their firm's systems affect the business regarding the costs and the profits. This study should be able to advise the managers on the kind of information technology model to consider increasing profitability. It should recommend a proper information technology model, concerning the costs associated with it and the revenue that comes alongside its implementation. This study will help managers make appropriate changes to their existing models of information technology. These changes will aim to increase revenue and reduce costs.
The expected outcome of the research is to be able to explain the direct relationship between information technology models and the profits of the organizations in. The study should be in agreement with the hypothesis and should also be able to reveal the extent to which these information technologies systems influence the success of different organizations. This research should also be able to show that economic decisions when it comes to information technology are an essential aspect of an organization's functioning(Brannon, 2015). A new approach to information technology will be introduced. Managers will now be able to view the information technology sector as a central department of the firm, that when not properly taken care of, will adversely affect the organization (Hitomi, 2017). Managers of firms might be forced to expand their knowledge of economics, and economic analysts may be introduced into the information technology sector.
This research assumes that the information technology models implemented in organizations affect the success of these firms. This statement, therefore, forms the hypothesis of this study.
From the research objectives, the following research questions arise:
- Do managers consider the costs of installing, operating, and maintenance of an information technology model before implementing it into the business?
- Do information technology models implemented in organizations affect the company's income?
- Do information technology systems in firms affect the success of the business? If yes, to what extent do these information technology systems impact the success of the organizations?
- Do the current management information system able to integrate with the technological advancement in the future? If yes, which model will be used to ensure that there is a smooth implementation process to avoid data loss during the process?
To answer research questions, we must use an adequately conceived research method that is in line with the type of research carried out (Eason, 2014). Quantitative methods will be used because of advantages such as the fact that it enables the evaluation of multiple sets of data and hypotheses, and does this faster and accurately. Quantitative techniques will also be used because they provide clear statistical data for inference (Goetsch, 2014). In answering the first research question, a questionnaire will be handed out to the managers of different organizations. I choose to use questionnaires because of advantages such as; they have speedy results, are cost-efficient, can cover many aspects of the topic, are easy to analyze, they have high scalability, and they are practical (Govindan, 2014). Another reason as to why I preferred questionnaires to methods like interviewing is due to the busy schedule that managers have. This method will therefore not interfere with their dynamic plan but instead have them participate in the study at their own convenient time. I will design the questionnaires in a manner that they will be as simple as possible. The polls will also be very easy to understand and respond. The second and third questions will be answered through a survey of the companies or a review of their books of account(Grasso, 2016).
This research will use a sample size of twenty organizations, scattered all over the country. In each organization, I intend to provide only one questionnaire to the managing director of each organization. In circumstances where the managing directors are not present or are unavailable, any other top-level manager such as the assistant or director of finance can fill the questionnaire on behalf of the managing director.
These objectives of this research include:
- To find out if managers in organizations check out the economic side of information technology models before implementing them.
- To find out whether the information technology systems present in organizations have the capability of affecting the income generated.
- To find out the extent that the information technology models affect the success of the organizations.
- To find out the key aspects of the innovative ideas that have a major impact on the organization management.
The significance of this research study is to induce an economic and technological approach to the implementation of information technology systems in organizations (Soomro, 2016). This project will help the managers of different firms to increase the resource utilizations of their organizations by choosing an information technology model that has a reduction in the costs of implementation and operation, and an increase in the revenue produced by that system(Kerzner, 2017). The invention and innovation of a management system with big data analyzing tool will help the organization to know the financial position and the measures to undertake to make a significant impact on the society.
Contribution to the Discipline
According to a case study conducted by Cisco Global Cloud, Index forecasts about the cloud traffic as a percentage of the total data center traffic will grow from (39% in 2011 to 64% in 2016). Studies also indicate that public and private cloud computing will be strong catalysts of server growth through 2015. A case study was conducted to determine how software development companies in Finland have evolved, and the challenges that they face (Shapira, 2015). This study showed that many organizations are still immature concerning the degree of production and the level of internationalization. The findings of this research brought to light the economic issues that are unfamiliar to the information technologies firms. Brynjolfsson & Hitt mention that the information technology sector must consider the financial perspective to guarantee its success in this evolving world. (Ahmed, 2016) This research, therefore, looks to expound on this critical issue facing the information technology sector. The data mining techniques and tools when integrated with the management system, the managers have an easy time making strategic plans to the organization increasing the efficiency and service delivery.
My knowledge as an Information Technology expert and on the subject of information technology provides me with a distinct advantage in the accomplishment of this project. As I am a part of this transformation process and numerous challenges, my knowledge on innovation and technology with the rapidly changing environment, will help me with the ability to provide proper solutions that will give a transformation in the relevant areas and present important results from the perceptive economic research.
Laudon, K.C. and Laudon, J.P., 2015. Management information systems (Vol. 8). Prentice Hall.
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