Evolution of IT in Business

VICTOR JADE O. LAURETA

RICOFEL ABAD
 The Good Old Days

Before we had access to modern technologies, it was a challenge for

the customer, consumers to engage with companies that weren't
convenient to them. For many, this was dealing with those within
your local geography or those you had access to. This put the buyer at
the behest of the seller. As time went on, there was greater focus on
margins and the pressure was felt by the buyer. (If you are a fan of
movies, every dystopian movie of the 1970s featured "the evil
corporation." There was a real sense of being powerless against large
enterprises.) However, as technology spread - in the form of PCs, then
the Internet, then mobile devices, then smartphones - buyers,
customers, and consumers felt more empowered to deal with
companies and corporations of their choosing. With social media, the
last few years have seen a tremendous change in how customers can
now openly review and engage with companies, provide insight into
products and services, negotiate prices with greater effectiveness, and
have insights at their fingertips that were previously only held by a
select few.
 The Decade of Social Business

The next few years will see a further acceleration of the change
in buying power of the customer. Social media is just the first
step to this broader change. What are just tools today will be a
more fully integrated experience of allowing the buyer the
experience they want - how they want it, when they want it,
where they want it - and under which terms they are willing to
engage with you as a company or seller. This goes beyond
tweeting a service request or using a community to answer
support questions or Yelp to read a review on a company's track
record. These are mere tactics. It is about a fully engaged
experience of always-on, rich data at your fingertips to help
make decisions against all aspects of a company and have a
more powerful voice to alter and influence the company's
trajectory.
 STAGES OF EVOLUTION OF IT IN BUSINESS

 Initiation
 Expansion
 Control
 Integration
 Data Administration
 Maturity
 1. Initiation

This is the first stage of evolution of information

technology in an enterprise. During this stage, an
enterprise acquires a few computer systems and
application software packages. A select enthusiast in the
enterprise familiarize themselves with the computer
systems and whatever software is available.
There is a high degree of decentralization as IT
professionals are busy developing new and basic
applications. Since most of the modern enterprises of
medium to large size are already using computer
systems, this stage is a history for them as they have
already passed through that stage.
 2. Expansion

The second stage is that of expansion. During this stage, the

information systems have found acceptability and every
department is in the process of acquiring more information
technology (IT) resources, as they are quite satisfied with the
benefits from the already installed IT applications. There is a
rapid and unplanned expansion of IT applications without any
serious long-term planning for this purpose. Only a few of the
applications are in areas that can offer substantial, tangible
and intangible, benefits.
As the demand from the IT infrastructure increases, it is not
equipped to cope up with. As a result, by the end of this stage,
there is a growing dissatisfaction among the users and senior
managers as they have now started feeling that information
systems have not been able to deliver what was expected of
them.
 3. Control

Realizing that the things are going out of control and per-
formance of IT infrastructure is not upto the mark, a system
of control is established. Earlier plans are reviewed and top
management shows greater interest in the information system
plans.
The orientation of development project is now focused on
managerial activities than the operational activities. The top
management’s involvement also results in accountability of
the user for benefits of IT infrastructure. Each user has to
ensure that the use of IT infrastructure is justified in terms of
contributions to the achievement of goals of the enterprise. By
the end of the third stage, users become more mature and
they start expecting from information systems flexibility and
responsiveness to the changing needs.
 4. Integration

The fourth stage of IT evolution begins with

redesigning of application to integrate the
information systems. Databases are designed and
developed and these databases offer online response
to the users need. By the end of this stage users start
realising the benefits of IT infrastructure in
improving communication within the enterprise.
 5. Data Administration

Development of databases for common use gives rise

to the need for proper administration of information
system. The information system architectures that
were planned during the fourth stage are
implemented. By the end of this stage, information
systems are fully integrated at the organisational
level. By now, formal organisational structures with
clearly defined duties and responsibilities for the
information function are drawn up.
 6. Maturity

The last stage of evolution of information system is ma-

turity. Information is treated as a corporate resource and
the control of the systems gets permeated into the hands
of line managers who seamless flow of information to
strengthen the decision gets making process.
Information systems take up the role of an enabler and
not just a facilitator.
Information technology has undergone tremendous
changes since the Nolan’s Model of evolution of
information systems was thought of However; it finds its
validity even today. Each organization implementing
information systems has to pass through these stages.
 6. Maturity

How long each stage would last, will depend upon the learning
speed of the enterprise. There are slow learners and fast
learners among the business enterprises, too. It is necessary
for a manager to understand at what stage of evolution of
information system is the enterprise passing through, to
understand what he should expect in future. The
understanding of these stages of evolution, thus, helps
managers to be proactive.
Nolan points out that the investment curve during these six
stages will take the shape of double’s’, i.e. the investment will
rise sharply in the first two stage to stabilize by the end of
third stage. New investments would be postponed. Again a
new phase of rise in annual investment in IT infrastructure
will begin in the fourth stage only to take a steady shape at the
maturity stage.
 The Evolution of IT and Its Impact

 1960s (We are babies)

 1970s (We are still children)
 1980s (We are still children but we can pout to
get what we want)
 1990s (Like teenagers, we now have some control
but don’t know what to do with it yet)
 2000s (We are growing up and feeling pretty cool
about it)
 2010s (Welcome to adulthood)
 1960s - We are babies

 Technology has little impact

 It is a curiosity

The company is king, but a benevolent king. Good

focus on customer satisfaction, but customers have
few options. Communication makes global business
difficult so customers make geographic-based
decisions
 1970s - We are still children

 Technology is for academics

 Has little impact

Greater focus on margins and revenue. Customers

become concerned about monopolies as customer
satisfaction has less importance.
1980s - We are still children, but we can pout to get what we
want.

 Technology invades the home and starts to change

behaviors

Customers become increasingly concerned about

company practices and lack of customers
satisfaction. Communications have improved to help
customers make more informed decisions and to
have better choices.
 1990s - Like teenagers, we now have some control but don’t
know what to do with it yet

 Technology is now everywhere

 A great leap forward
 It begins to connect us around the globe

e-Commerce helps give customers a greater and

more informed range of decisions. Companies use
the web to make themselves more accessible but
haven’t begun truly focusing on customer
relationships.
 2000s - We are growing up, and feeling pretty cool
about it

 Technology enables more seemless communications

across the globe.
 Growth is explosive, but like “EXPLOSIONS” is
uncontrolled all over the place.

Social Media allows customers to articulate their

satisfaction with companies and make decisions
based on the company’s behavior not just on price
alone. Companies begin to react and change.
 2010s - Welcome to adulthood!

 Technology becomes fully integrated into our daily lives.

 We live more fully in a digital world.

Social Businesses are the evolution of companies now

keenly aware that how they act and how they engage with
customers can be more important than price, that the
relationship is part of the value.
Companies allow greater transparency into all aspects of
the company and use social media channels to effectively
engage with customers, but with a focus on what the
customers wants and how best to deliver it to the
customers.
 ACTIVITY

 1. How does Information Technology affects the

work in business models, commerce and market
structure nowadays?
 2. What are the innovations of I.T. in workplace and
labour market?
 3. How does I.T. affect the craft of teaching?