Abstract
This paper seeks to address the current hardware platform trends and the key managerial challenges that organizations face in the process of acquiring and investing in information systems and technologies. For most companies, strategic decisions face several challenges concerning the rising cost of computing services and the integration of information stored in different applications (Atler 2006).
In this light, the main problem that companies face is the rising cost of computer services such as consulting and system integration. Furthermore, much-sophisticated hardware and software are used within organizations, thus increasing the investment in IT infrastructure as opposed to the core business operations. As information systems (IS) are an integral part of organizations, this paper analyses the various challenges that managers face regarding IS and the various contemporary hardware platform trends that seek to deal with the problems.
The key challenges discussed include the IS investment challenge, the strategic business challenge, the globalization challenge, the information technology infrastructure challenge, and the responsibility and control challenge. On the other hand, the various technological trends that address these issues include the integration of computing and telecommunication platforms, grid computing, on-demand computing, autonomic computing, and edge computing. However, on-demand computing is seen as the best alternative, as it addresses the significant issues related to the cost of computing and management of IS within an organization.
Introduction
The business environment in which organizations operate today is always changing, and it is becoming increasingly complex. Organizations, both private and public, feel increasing pressures that force them to respond quickly to changing conditions and to be innovative in the way that they operate (Turban et al. 2007). Pressman (2005) asserts that such activities require organizations to be agile and make frequent and quick strategic, tactical, and operational decisions, some of which are very complicated. Making such decisions may require considerable amounts of relevant data, information, and knowledge. Processing these, in the framework of the needed decisions, must be done quickly, frequently in real time, and usually requires some information systems or information technology support (O’Brien 2005).
According to Haag, Cummings, and McCubbrey (2002), companies face cost pressures in the operation of their IT infrastructure; they expend more than 50% of their IT budget. This implies that firms must keep prices in line with the competition and the firm’s value change. Keeping costs low and services to customers are a very big priority; hence the objective of this report is to present the need for the implementation of a technology trend such as utility computing to reduce the unfavorable expenses.
In addition, any feasible Information System plan must be able to include the provisions for operating and upgrading the IT infrastructure to support the changing needs. Since many aspects of IT infrastructure involve technical issues that seem far removed from business issues, it is often difficult for executives to participate effectively in discussions about a long-term strategy for IT infrastructure (Cadle & Yeates 2007). Firms also need to implement flexible infrastructure that can endure high increases in computing loads and common threats from hackers and in peak loads and viruses. Because customer and worker anticipations for service are increasing, companies need to increase their service levels to meet customer demands.
Therefore, the scope of this research is to analyze and present the specific solutions to the challenges that managers face in relation to IT infrastructure and the basic implications for organizational sustainability.
Organizational Challenges
Despite the exciting opportunities provided by information systems for both businesses and individuals, there are still new problems, issues, and challenges for managers. It is researched that most companies find it difficult to integrate computing and telecommunication platforms at an affordable cost. Furthermore, most firms do not provide technical solutions as their core business operations, but still, they are faced with a combination of managerial, organizational, and technological problems (Stair & Reynolds 2006).
Previously, organizations invested in information technology and systems because such strategies provided real economic value to the business (O’Brien 2005). According to Alter (2006), the decision to implement or sustain an information system presumes that the profits on this investment will be higher than those of other assets. These higher profits can be expressed as increases in productivity, as increases in revenues which will improve the firm’s market value, or perhaps as better long-term tactical positioning of the firm in certain markets which produce superior returns in the future.
Despite all the information system’s capabilities, organizations have not been able to realize the full potential; the cost of computing services has increased dramatically, the cost of the software remains high, and the intensity of computing and communicating has increased as other costs have declined. Thus, many companies such as those dealing with manufacturing and production do not keep much emphasis on the running of IT infrastructure because it is not the core business operation.
In some instances, organizations are required to invest in information systems simply because such investments are a requirement in the corporate plan (Elliot & Starkings 1998). For instance, an automobile company may be forced to implement an intranet for managing the information flow between the components of the production system to make motor manufacturing information more accessible to different parts of the organization, increasing precision, and lowering costs. Thus, from a managerial point of view, it is researched that:
There are five key management challenges in building and using information systems:
- obtaining business value from information systems;
- providing appropriate complementary assets to use information technology effectively;
- understanding the system requirements of a global business environment;
- creating an information technology infrastructure that is flexible enough to support changing organizational goals; and
- designing [or acquiring] systems that people can control, understand, and use in a socially and ethical responsibility (Laudon & Laudon 2006, p.32).
Hence, the following paragraphs explain the outlined managerial, organizational, and technological challenges that contribute to the problem of high IT costs and management constraints in organizations:
The information systems investment challenge
Companies experience the challenge of obtaining meaningful returns on the information systems investment. One of the greatest challenges that managers face is that of ensuring that there are meaningful returns in the procurement of IT. It is one thing to use information technology to support the business processes such as formal rules that have been developed over a long period of time for accomplishing a task.
On the other hand, it is another thing to generate revenues using it (Stair & Reynolds 2006). The strategic management seems to ask themselves the following questions: How can the investment in information systems/technology be evaluated? Are there any returns that can be feasibly realized from the systems? Do competitors gain more from their investments? More so, these questions present tough decision-making scenarios that most managers are unable to handle. From the managerial perspective, a company may find it difficult to have a clear-cut- decision-making process for producing an alternative that would be profitable to the organization.
The strategic business challenge
Despite heavy IT investments, organizations are still not realizing significant business value from their systems, because the appreciation of complementary assets required to make the technology asset work is somehow lacking. There is dynamism in technological advancement as compared to the firm’s ability to handle the growing power of IT. To benefit fully from IT, gain productivity, and become competitive, many organizations need to redesign and restructure their business operations by making major changes in the organizational culture and developing or acquiring business models that support sustainable business processes (Elliot & Starkings 1998). In essence, new technology alone cannot guarantee commendable business benefits, and thus there is a need to acquire and invest in assets that are to use IT effectively.
The globalization challenge
Organizations experience the challenge of understanding the business and system requirements for the global economic environment. The advancement in international trade and multinational enterprises calls for the development and design of information systems that support business operations in different nations. Previously, differences in culture, trade tariffs, and political governance resulted in conflicts among international trade parties due to the failure to centrally control business operations. To develop integrated, international, IT, organizations need to acquire and develop hardware, software, and communication standards that support global business operations and multinational enterprises (Haag, Cummings & McCubbrey 2002).
The information infrastructure challenge
Since the business conditions and technologies change rapidly, organizations find it difficult to develop an IT infrastructure that supports their strategic business goals. Many companies are filled with information technology that is obsolete and cannot support the rapidly changing operating environments. There are expensive and complex systems like the generic legacy systems that act as constraints to the core business operations. According to O’Brien (2005), dealing with new business and technology challenges may need redesigning the organization and developing or procuring a new IT infrastructure.
However, in the cases of fragmented data and information, it may be difficult to create an IT infrastructure that can be able to hold and share knowledge in an enterprise-wide fashion (Turban et al. 2007). Thus, there is a need to develop a system that can integrate the various resources in the organization, including knowledge. These systems, such as Knowledge Management Systems can be able to integrate the isolated information and knowledge to support the organization’s objectives that aim at coping up with a turnover, rapid change, and downsizing by making the expertise of the organization’s human capital widely accessible.
Responsibility and control challenge
The decision of designing applications that can be used in an ethically and socially responsible manner seems to bring about controversial thoughts. Furthermore, the security of information is a major issue that contributes to the high costs of maintaining an IT infrastructure. The ethical and social issues brought about by information systems include threats to individual privacy and intellectual property rights, computer-related health problems, computer crimes, and the elimination of jobs (Deborah 2009). A major strategic management challenge is to build IS that users can be able to use and manage responsibly.
IS are essential to business, government, and daily life that companies must make reliable steps to make sure that there is security, integrity, and reliability regarding corporate data and information. Major questions that managers tend to ask include: Can high-quality standards be applied to the current IS? Can high secured systems be acquired or developed? Can systems that respect the rights of people be designed? In essence, information systems must be designed to secure, work as intended, and thus support human functions.
Solutions and Implications
Due to the number of challenges organizations face, they need to integrate information stored in different applications, on different platforms like the internet and mobile services. Companies need also to build essential infrastructure that can tolerate a huge increase in peak loads and routine threats from hackers and intruders. Since customer and employee expectations are increasing, organizations need to increase their service levels to fulfill customer requirements (Stair & Reynolds 2006).
Hardware Platform Trends
The various trends in hardware that could be implemented in the organizational process to address the challenges addressed in the previous section are:
The integration of computing and telecommunication platforms
The purpose of business telecommunication is to make it possible for employees, customers, and suppliers to communicate whenever necessary to accomplish their work. A telecommunication environment provides connectivity on demand by providing communication channels for text, voice, and video images (Haag, Cummings, & McCubbrey 2002). This implies that computing operations may be performed over the internet through the integration of hardware platforms. At the client point, communication devices such as handheld computers and cell phones integrate all the information system capabilities including phone, camera, and computer into one device.
At the server and network level, it is becoming a widespread practice to integrate the telecommunication and computing platforms into a single network; the internet (Stallings 2006). If this alternative is followed, the firm will be able to increase its computing power at a very low cost and address the strategic business challenge, since computing and telecommunications are integrated (Messerschmitt 1996).
Grid Computing
It involves linking geographically distant computers into a single network to make a virtual mainframe by combining the processing power of all the systems on the grid (Laudon and Laudon 2006). This approach ensures that the computing resources like the processors of the remote computers are utilized in case of idleness. Due to the high-speed Internet connections, firms can connect remote machines economically and move a large amount of data.
Consequently, distributed grids can integrate computing resources of multiple organizations, also termed as multiple administrative domains. This can enhance commercial transactions, thus making it possible for a firm to venture into a global market. For instance, Globus Alliance and other providers provide grid computing solutions. The business implication of this strategy involves cost saving, speed of computing, and agility.
On-demand Computing
Also known as utility computing, this technological solution allows firms to provide computing resources when there is demand for data processing operations. In this case, companies can reduce their investment in IT infrastructure by investing just enough to handle average processing needs and paying for as much additional computing power as the market demands. A firm dealing with computational services can be consulted to provide services for information system procurement and security, and a service desk for resolving issues with all the providers of the company’s IT service. Companies like IBM have been able to embrace utility computing since it provides value to the firm and eases the business management processes (Shankland 2003). This business computing model is further explained in the next section (Integrating hardware platform trends), as it is a more applicable model.
Autonomic Computing
This computing model encompasses a corporate effort to build systems that can configure themselves and even guard themselves against threats like intruders or viruses; this is because of the complexity of the computer systems hence difficult to manage. Autonomic computing frees system administrators from many system management and operational tasks so administrators can employ a lot of their IT skills in fulfilling the core business needs (Hariri & Parashar 2007).
Edge Computing
This technology is in line with web-based applications, in that the most important contents, logic, and operations from the website are acted upon by smaller, less expensive servers located nearby the user. Like grid computing and on-demand computing, it uses the internet as a platform to balance the workload experienced by a company across many workstations remotely located on the network. This approach increases the flexibility of the firm’s operations, enhances service levels, lowers technological costs hence addressing the information technology investment challenge (Novell 2009).
From the above alternatives, on-demand computing is preferred as the best alternative as it addresses the challenges faced by organizations concerning Information systems investment and management. Therefore, the next section examines on-demand computing in the context of its strategic implication for managerial and corporate goals.
Integrating Hardware Platform Trends
On-demand Computing
Selecting a proper hardware platform that addresses the specific business needs is a key managerial decision that requires greater considerations of the IT value to the organization. In this context, we discuss on-demand computing as a good alternative for managers seeking to ensure that they realize the value of information systems. The utility computing model reduces the hardware and software expenses that a company may incur in its information systems maintenance and management (Laudon & Laudon 2006).
A firm can outsource the IT operations to another firm so as to concentrate on the core business plans and only request for computational operations when there is demand (Schauland 2009). The objective of on-demand computing is to enable an organization to address the business issues related to the costs of IT infrastructure. Therefore, the following points outline the ways in which on-demand computing would solve the challenges that a company faces and thus a strategic business implication for a sustainable mission:
- The information system challenge: By minimizing the IT operations to the general required tasks like data entry and routine maintenance, an organization can be able to obtain business value from the minimized IT management. On-demand computing may only be requested when there is a need for application development and maintenance.
- The strategic business challenge: through utility computing, a firm will be able to reinforce its assets for the core business operations, since the assets needed to use information technology will be handled by another firm, hence realization of the business values.
- The globalization challenge: utility computing will help executives to tackle the globalization challenge by shifting the firm’s infrastructure from a fixed capacity to a flexible infrastructure. This will enable the firm to launch an entirely new business process that fits the global economic challenge.
- The IT infrastructure challenge: this is the main challenge that faces most organizations. Through on-demand computing, companies can acquire hardware and software that are up to date through a firm that offers on-demand computing. This will enable such companies to develop IT infrastructure that can support their mission when there are changing business conditions.
- Responsibility and control challenge: Since a company offering on-demand computing will be much involved in IT operations, most managers will have to worry less about the use of the information systems. The small remaining infrastructure owned by the company would be properly managed by a system administrator (Shankland 2003).
Therefore, for organizations to have full potential in the implementation of on-demand computing, they need to redesign their operations so as to benefit from such services. Companies need to make intensive changes in the IT infrastructure, design new business models, and eliminate out-modeled business processes and organizational structure.
In the context of IT infrastructure, organizations should rationalize their computational procedures by having standard policies that enable their employees to recognize the need for corporate responsibility that governs the use of information systems. Therefore, companies like IBM, Sun Microsystems, Microsoft, and HP can be consulted to offer on-demand computing (Schauland 2009). These companies have departments that handle change management for application development and maintenance, and migration of applications from testing to production status. Such companies also provide security and a service desk for solving issues with all the providers of the firm’s IT services.
Conclusion
In general, most organizations have been operating on a fixed IT infrastructure that presents them with excessive costs of the information technology budget. In this paper, we have looked at the various challenges that most strategic management teams in organizations face through Information Systems acquisition and maintenance, and the trends in hardware platforms that can address those challenges.
The key management challenges in building and using information systems/technology include the information system investment challenge, the strategic business challenge, the globalization challenge, the IT infrastructure challenge, and the responsibility and control challenge. The contemporary hardware and software platform trends that address the overwhelming need to reduce IT cost, incorporate information across platforms, and provide a higher level of proper managerial control and service include the combination of computing and telecommunications platforms, grid processing, edge computing, utility, and autonomic computing. In essence, on-demand computing is seen as the most appropriate for many small and large organizations since it addresses the business issues faced by such firms.
Considering this, on-demand computing can be implemented in a company’s business operations to realize its strategic objective and hence a competitive advantage. It is therefore appropriate for the strategic management to opt for a more flexible IT infrastructure that could enable the firm to launch new business process that they would never attempt with a fixed IT infrastructure (Stair & Reynolds 2006).
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