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What are some of the challenges of information technology?

The dominance of information technology (IT) has caused a rethink of how technology
fits into operations strategy. Although there is a positive connection between adopting
IT and productivity growth, it is not guaranteed. But where failure occurs it is usually
caused by managerial, implementation or organisational factors. Moreover, different
kinds of IT pose different kinds of challenge. Limited ‘function IT’, such as CAD, facili-
tates a single function or task. Enterprise IT extends across the entire organisation.
Because of this it will need potentially extensive changes to the organisation. Network
IT facilitates exchanges between people and groups inside and/or outside the organi-
sation. However, it does not necessarily predefine how these exchanges should work.
Enterprise resource planning (ERP) is an example of enterprise IT. It integrates the plan-
ning, resource allocation and control activities of all parts of the business – the better
to make informed planning and control decisions. However, the practical implementa-
tion of this idea has proved to be very complex and expensive. If a business’s current
processes do not fit with the structure of whatever ERP package is purchased, they can
either change their processes to fit the ERP package, or modify the software within the
ERP package to fit their processes. But both of these options involve costs and risks.

How can process technology be evaluated strategically?
Evaluating process technology quite literally means determining its value or worth. It
involves exploring, understanding and describing the strategic consequences of adopt-
ing alternatives. We outlined three possible dimensions: (1) the ‘feasibility’ of technol-
ogy indicates the degree of difficulty in adopting it, and should assess the investment
of time, effort and money that will be needed; (2) the ‘acceptability’ of technology is
how much it takes a firm towards its strategic objectives. This includes contribution in
terms of cost, quality, speed and so on, as well as the development of strategic resources.
In general terms it is about establishing the return (defined in a very broad manner)
that the operation gets for choosing a process technology; and (3) the ‘vulnerability’
of technology indicates the extent to which the firm is exposed if things go wrong. It is
the risks that are run by choosing that specific technology. The uncertainties that lead
to vulnerability in the innovation process include

● market vulnerability;
● regulatory;
● social and political vulnerability;
● acceptance and legitimacy of vulnerability;
● timing vulnerability; and
● response vulnerability.

Further reading
Arthur, W.B. (2009) The Nature of Technology: What It Is and How It Evolves. London: Allen
Lane.
Boardman, A., Greenberg, D., Vining, A. and Weimer, D. (2006) Cost Benefit Analysis: Concepts
and Practice, 3rd Edition. Harlow, UK: Prentice Hall.
Bocij, P., Greasley, A. and Hickie, S. (2008) Business Information Systems: Technology, Develop-
ment and Management for the E-Business. Harlow, UK: Financial Times/Prentice Hall.

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