An Introduction to the 6 Important Reasons Businesses Use IT
In this day and age, Information Technology (IT) is something all businesses, no matter how big or small, should be investing in. The ability to collect and leverage valuable data and to make business operations more efficient can be the difference between failure and success. It’s why IT has become a major priority for companies around the world and why it should be a major priority for your business as well. The following are six reasons why using IT is so vital to your business.
1. Operational Excellence
A business that runs efficiently and productively is a business that is more able to minimize overhead costs and maximizes its resources. The less efficient your operations are, the less productive your employees will be. Information Technology will allow you to streamline work processes and improve communication within the company, thereby helping your employees save time and making your operations much more efficient.
For example, the use of team collaboration software can allow employees to immediately share data with one another and to edit or comment on documents in real time. This improves efficiency tremendously compared to emailing documents to one another and having to wait for a response that may not be timely. Sharing documents via a collaboration platform helps to keep project data more organized and accessible to all members of the team, which means your employees won’t have to constantly search through their emails or desktops for important documents they received days or weeks ago.
As a result of improving the efficiency of your business operations — and therefore, the productivity of your employees — you’re much more likely to see an uptick in profits. For example, your employees are wasting less time on time-consuming tasks, which means the money you’re paying them is resulting in more and better work.
2. New Products, Services, and Business Models
Information Technology can help your company discover better business models and identify new types of products and services to offer your customers. If you don’t adopt new IT solutions, your products and services are likely to grow stale.Consumers demand constant innovation, especially as technology continues to evolve to match their ever-changing needs and desires.
Figure out New Products and Services to Offer to Customers
The access to information that IT provides, including marketing and customer data, as well as the ability to engage with customers directly through social media and other communication channels means it’s much easier to identify the needs of your customers.
Customers more than ever leave feedback online, and you can collect this feedback to determine how their needs are changing, what they want out of your products or services, and how you can improve your products or services. In fact, you can simply ask them directly through the use of surveys, which can be sent out to customers by email or even posted on social media.
Create New Business Models to Deliver Products and Services to Customers
Your willingness to adopt new IT solutions can open up new possibilities when it comes to how you deliver your products and services. For example, the use of QR codes makes it extremely convenient to deliver discounts to your customers while they are in your store. Even setting up an e-commerce page can help bring in a significant number of customers that you may not have had access to before. Refocusing your marketing efforts on mobile can also have a positive impact on your business model.
The bottom line is, IT can help you improve on your existing business models as well as help you create new business models that will put your company in a better position to succeed in the present and the future.
3. Customer and Supplier Intimacy
The use of Information Technology makes it easier to engage with customers and suppliers, which, in turn, allows you to be more effective in building long-term relationships with both. This can be done by positioning yourself to support both customers and suppliers in a more organized and efficient way; for example, you can improve the ease of which you can be reached by having representatives available by phone, email, live website chat, and via social media. Additionally, business-to-business (B2B) integrations can streamline transactions and create a “stickiness” for important customers and suppliers.
Making it easy for customers and suppliers to reach you will help you deal with any issues, questions or complaints quickly, avoiding their frustration with long response times or being stuck with a problem and no one to help them. Using IT to improve your availability will only help to improve your relationships with both customers and suppliers, and will help to build both trust and loyalty.
Additionally, the use of CRM (customer relations management) software allows you to keep all of your contact information in one place. You’ll have instant access to information about your customers, including what they’ve purchased, the feedback they’ve provided, and much more. All this makes it easier for you to develop your relationship with your customers, as you target your marketing efforts more accurately based on their habits and preferences.
4. Improved Decision Making
Crafting an IT budget is an important and difficult task in any company. But without a technology roadmap, it is often more difficult to predict what IT systems a business needs to optimally fulfill its goals. Without a strategy in place, executives are typically unable to know how to strategically use the requisite IT solutions to fulfill the overarching business vision. Thus, having a technology roadmap can help a business to effectively budget for the future.
Information Technology software allows you to collect vast amounts of data, including what individual visitors are doing on your website, how certain web pages are performing and much, much more. Not only can you use IT to collect this valuable data, but it will be automatically organized for you so that you can easily analyze the most important pieces of data, from your pricing data to your supplier contracts and more.
Businesses who didn’t have these capabilities before will find that it’s an absolute game changer. It allows them to make much more informed decisions from the top down. Not only can you collect and analyze mass amounts of relevant data to inform your decision making, but it means you no longer have to rely so heavily on historical trends or forecasts, which are rarely reliable in a business landscape that is continually and rapidly evolving.
5. Competitive Advantage
Often a company will lack an overall, executive-level agreement on how to leverage IT systems for the furthering of the organization’s goals. A technology roadmap identifies where the business wants to be in the future, and how technology can help the enterprise get there, thereby helping a company to plan the use of IT systems to achieve both short-term and long-term goals.
The use of Information Technology will help to provide you with a real competitive advantage over other businesses within your industry. This is largely due to the previously listed reasons — the ability to leverage IT to improve your products and to improve your relations with both customers and suppliers to help boost your brand reputation. The better your reputation is, the more you will stand out from your competition.
Additionally, by implementing IT systems into company operations, your company will make more efficient use of its resources. The money and time you save as a result can then be dedicated to other areas of improvement throughout the company. Improving your efficiency is practically akin to increasing your budget, which is a huge advantage.
A decade ago, you could argue that Information Technology was a luxury reserved for bigger businesses with bigger budgets. However, that has all changed due to the fact that everyone has access to newer, more advanced technology — including your customers. This means that in order to stay relevant within your industry and to keep up with your competitors, you need to implement IT to simply survive.
Keeping up With the Competition
Even if you’ve got a niche market cornered, you’re always going to have competition. If you don’t adopt IT as an important part of your business you continually invest in, it will only be a matter of time until your competition passes you by. It’s also worth mentioning that not investing in new IT solutions that have been proven to help consumers due to their cost can hurt your reputation, especially if your competition has adopted those very solutions. A good example of this is the chip-and-PIN cards.
Almost five years ago, most of the world switched to chip-and-PIN cards, which are credit cards that use a microchip and require a pin number instead of the traditional magnetic stripes and signatures. Unfortunately, banks in the U.S. were extremely late in beginning to adopt these cards, which are known as EMV cards. Even now, while they use microchips, they still rely on signatures instead of pin numbers.
One of the reasons banks were stalling on the adoption process was because of the cost involved in switching over. They found that it was more affordable to simply cover the costs of fraudulent use instead. Rather than updating their technology to prevent fraud, they decided it was more cost-efficient to let fraud occur. Obviously, this is a sad commentary on American banks, and is one of the reasons their reputations have taken a huge hit over the past few years. Eventually, they realized that they would have to switch over or risk falling way behind the rest of the world.
When it comes down to it, adopting new IT solutions can not only help improve your customer service, not doing so to the perceived detriment of your customers will hurt your reputation, especially if your competitors are making the leap. While IT can and will help improve efficiency, save money and make money, IT adoption can also be extremely beneficial to your customers. Your customers will notice — and if a competitor leverages a new IT solution to their benefit that you decide not to implement, you may lose them. It’s yet another reason why you can’t afford not to invest in IT.
Compliance with Government Rules and Regulations
Although the use of IT can be incredibly beneficial, it also means you have access to sensitive information. This in turn means that anyone with advanced IT capabilities has a lot of power, which can’t go unchecked. It’s why there are many rules and regulations in place to not only prevent the abuse of such power, but to make sure you are responsible with the data you have access to. The following are some basic things that you will need to do in order to stay compliant with rules and regulations regarding IT use:
- Stay current on software updates and patches – Any data you are collecting and analyzing concerning your customers is considered sensitive data. To protect this data from potential hacks, you will need to regularly update your security software and download patches to deal with any vulnerabilities that are found. Not doing so can result in calamitous consequences. The Equifax breach is a good example. The breach occurred because they failed to patch a security vulnerability that was well known, and it exposed extremely sensitive data of potentially millions of people.
- Maintain records of all your data processing activities – Europe recently passed GDPR (General Data Protection Regulation) this year, which focuses on data security and individual privacy. If any part of your business focuses on Europe in any way, you will need to stay in compliance or you will risk being fined upwards of four percent of your global gross revenue. To remain compliant, you must maintain records of all of your European data processing activities. This is because all European individuals can request to have their data deleted — which means you need to have the ability to quickly identify and access any data collected on anyone who makes this request. You should also delete all irrelevant data as soon as possible. Additionally, you need to have security protocols in place that allow you to identify, investigate and report data breaches within 72 hours.
- Use encryption for data transfers – If customers are sending you personal information online, such as their email addresses or credit card information, you should make sure that all real-time data is sent over TLS (transport layer security) to prevent potential interception. TLS will encrypt the data so that even if it is intercepted, it can’t be used.
- Protect credit card users – The PCI DSS (Payment Card Industry Data Security Standard) requires that you take steps to protect credit card users if you accept credit card payments. To remain compliant, you will need to set up a firewall configuration policy and test procedure to protect credit card data, avoid using vendor-supplied system password defaults, heavily restrict access to cardholder data, regularly test your security systems, and encrypt the transmission and storage of all cardholder data so that if it is somehow stolen despite your security efforts, the data will be unusable.
- Schedule annual system penetration testing – The Internet of Things has surged over the last few years, with significant growth in interconnected devices and endpoints. This has resulted in new vulnerabilities in networks, which can lead to financial or reputational damage. To ensure that any IT systems, including IoT systems, you might be using remain compliant with security regulations, you should schedule annual system penetration testing to identify vulnerabilities and to address them.
The Importance of Connecting Business and Technology
The main priority of a business should be to address the problems and needs of your customers with products or services that work as a solution. The importance of technology in our everyday lives means that technology simply can’t be ignored when it comes to running your business. As technology advances, customers’ needs and problems are going to change, and so will their expectations of how your products and services fulfill those needs and problems.
Not only do you need to invest in Information Technology to meet these particular challenges, the adoption of new IT solutions will help you improve your company’s efficiency and operations as well as find new ways to improve your business model. This will not only help keep your business afloat, it will help you stay competitive within your industry.