It Significance in a Business Environment

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TABLE OF CONTENTS

Topic:Page:

1.EXECUTIVE SUMMARY2
2.INTRODUCTION3
3.THE BACKGROUND OF IT IN BUSINESS4
4.THE CONVERGENCE OF IT AND BUSINESS IN THE DIGITAL ECONOMY6 5.INFORMATION TECHNOLOGY'S SIGNIFICANCE IN STRATEGIC BUSINESS PLANNING11 5.1 THE STRATEGIC ALIGNMENT OF ICT AND BUSINESS STRATEGY11

6.CONCLUSION13
7.REFERENCES14

Information technology significance in the business environment 1.Executive Summary
A central tenet of network based technologies is their ability to eliminate geographical, distance and time constraints that have traditionally manifested themselves as boundaries encapsulating and protecting local business institutions from the more harsh realities of global competitive forces. The convergence of information and communication technologies in the Internet is not only of technological relevance, but also holds substantial implications for business in removing traditional boundaries and barriers to business operations. The Governor of the South African Reserve Bank, Mr TT Mboweni, in addressing the Black Management Forum Conference on 13 October 2000, brought home the true consequences of this reality in stating that; “Financial markets around the world are being integrated into a single global market and, whether we like it or not, emerging and developing countries are being drawn into this process. The growing economic interdependence of countries worldwide can be seen in the greater volume and variety of cross-border transactions and in the faster and more widespread diffusion of technology ... Another consequence of globalisation, is increased competition. Financial liberalisation, the removal of controls and the breakdown of international barriers, make it possible for new entrants to participate in markets which were previously closed to them.” This statement gives meaning to the fact that South Africa is no longer an island unto itself, but that it has become part of the so called global village. It is a village where competition is rapidly increasing with the click of a mouse at Internet speed. The inescapable reality is that the forces, complexities and interdependencies associated with global economic integration need to be clearly understood by South African business executives and strategically managed to ensure survival in a highly competitive global business context. Globalisation is forcing executives to recognize the need to create value for their clients through the effective utilization of technology and the redesigning of business systems that take into account the strategic realities associated with globalisation. The concept “globalisation”, from a South African perspective embodies a sense of both opportunity and threat, both elements that feature prominently in contemporary strategic management theory and practice. While economic integration, access to international markets, and an exchange of technology and information holds significant opportunities for South African business institutions, it also hold the threat of increased competition and exposure to the whims of fluctuating international markets. Adverse developments in international markets hold far greater risk for business institutions in developing economies than for the more established institutions in the developed countries of the world. Business institutions in the developed nations tend to have a greater international distribution and delivery capacity and a greater level of experience of international markets and consequently can compete on a far more decisive basis globally.

2.Introduction

The current era has been termed the knowledge era. It needs to be questioned what makes it so different from previous eras to have been specifically characterised as constituting a new era of business. A central tenet of the current era is the convergence of information technology and business systems in what has been variously termed the digital, knowledge, global, network or the new...
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