The Role of Information Technology in Business Administration

Information is at the heart of all organizations. In less than 70 years, we have shifted from an industrial society to a knowledge-based economy driven by information. Without information about the processes of and participants in an organization—including orders, products, inventory, scheduling, shipping, customers, suppliers, and employees—a business cannot operate.

Transforming Businesses through Information

Information technology (IT) includes the equipment and techniques used to manage and process information. Today, businesses depend on information technology for everything from running daily operations to making strategic decisions. Computers are the tools of this information age, performing extremely complex operations as well as everyday jobs such as word processing and creating spreadsheets.

The pace of change has been rapid since the personal computer became a fixture on most office desks. Individual units became part of small networks, followed by more sophisticated enterprise-wide networks.

Management Information Systems and Strategic Advantage

Harnessing the power of information technology gives a company a significant competitive advantage. For example, TD Ameritrade’s management information system (MIS) is necessarily large given the size of the assets it manages. Their open architecture environment enables financial advisors like John Daly to select the technology they want to use.

Furthermore, the company provides a robust set of software as a service cloud-based tools that allow firms to focus on core competencies rather than having to hire, train, and maintain a complex set of IT resources that clients can trust. The technological infrastructure required to transmit information throughout a multibillion dollar, nationwide institution often involves data that is private and financial in nature.

Concept	Description
Information Technology (IT)	Includes the equipment and techniques used to manage and process information.
Management Information System (MIS)	A system required to manage and transmit information throughout large-scale institutions.
Software as a Service (SaaS)	Cloud-based tools that allow businesses to focus on core competencies without maintaining complex IT resources.