A study on the significance of information technology in various fields

The outcome of the integration of computer and telecommunications technology is today called as Information Technology which is popularly known as Info Tech. Businesses use IT in many different ways. Some IT applications automate a variety of basic business activities, from production control systems in manufacturing to word processing and financial calculations in office work. Other applications involve databases and information retrieval that support management, customer service, logistics, product design, marketing, and competitive analysis.Through IT, companies can combine computing and communications to facilitate ordering and product tracking. IT functions often are implemented as mechanization of older, manual processes; ideally, however, they involve fundamental redesign of processes.

Several explanations have been put forward for the productivity paradox. One explanation involves measurement difficulties. Much of the expected effect of IT would occur in the service industries, where productivity is always difficult to measure. IT may lead to improvements in services that do not readily show up as productivity improvements.

[...] Because business-to-business e-commerce is built on the history of pre-Internet electronic transactions, many companies have substantial relevant expertise already in place. As a result, business-to-business commerce has expanded rapidly. Business-to-business e-commerce enables businesses to offer their customers additional services and the means to improve communication. By improving communication, business-to-business e-commerce makes it possible for businesses to outsource more easily and to streamline and boost supply chain processes. It also allows businesses to eliminate some intermediary organizations between customers and suppliers but has also given rise to new classes of business intermediaries, such as on-line auctions. [...]

[...] The study also found that 54 percent of those who are not on-line believe the Internet is a dangerous thing percent say they do not think they are missing anything by staying away from the Internet percent say the Internet is too expensive, and 36 percent express concern that the on-line world is confusing and hard to negotiate. DOC has found similar reasons that explain why some people do not have Internet access (U.S. DOC 2000b). Among surveyed households with annual incomes less than $15,000, one-third of respondents without Internet access ( 32.6 percent) cited cost as the reason and slightly more than one-quarter cited "don't want it" ( 26.6 percent) as the reason. [...]

[...] In the past few years, however, several studies that have used a variety of approaches have concluded that IT is having a positive effect on productivity (U.S. DOC 2000a; Council of Economic Advisers 2001). Economists who were skeptical about the impact of computers on U.S. productivity have begun to credit IT for increases in the growth rates of output and productivity since 1995. Several studies found that the acceleration in productivity growth during the mid-1990s was attributable largely to increased computer use (capital deepening) among IT users and also to technical advances and innovations by IT producers (U.S. [...]