What Is Information Technology? Definition And Examples

Why is information technology important?

It's been said that data is what powers industries worldwide. That might be hyperbole, but few businesses -- large or small -- can remain competitive without the ability to collect data and turn it into useful information. IT provides the means to develop, process, analyze, exchange, store and secure information.

Data processing plays a significant role in the following core business practices:

• Product development and design.
• Marketing and market research.
• Sales and invoicing.
• Data analysis and decision-making.
• Customer development and retention.
• Accounting and taxes.
• Human resources and payroll.
• Regulatory compliance.

Information technology plays a vital role for businesses in the following ways:

• Facilitates communication and collaboration. IT enables seamless communication and collaboration across different locations and time zones. For example, global corporations that are spread across continents can use video conferencing, instant messaging and content collaboration tools to bridge geographical distances and communicate effectively.
• Advances pervasive computing. Computing has penetrated practically every part of business and much of our personal lives. The ubiquity of computing -- also referred to as pervasive computing -- is another reason why IT is critical. Computing devices have evolved well beyond PCs and servers. Today, all businesses and most people have and use multiple computing devices, including phones, tablets, laptops, game consoles and even doorbells, thermostats, vacuums and many kitchen appliances.
• Enhances efficiency and productivity. IT systems and tools streamline processes, automate repetitive tasks and provide access to real-time data, thereby improving the overall efficiency and productivity of businesses. For example, a retail company with an integrated IT system can use an automated inventory management tool to track stock levels in real time and replenish them through automatic reordering.
• Enables access to information. IT provides access to vast amounts of information and knowledge in databases and online libraries, empowering individuals and organizations to make informed decisions and stay updated with the latest developments.
• Supports innovation and creativity. IT fosters innovation by providing platforms for creative expression, experimentation and problem-solving. For example, consider a software development company utilizing IT platforms for innovation. Its developers can collaborate in virtual environments, experiment with new coding techniques and technologies and create groundbreaking software through iterative testing, feedback loops and problem-solving.
• Supports critical business operations. IT is essential for the smooth functioning of modern businesses, from managing operations and finances to marketing and customer service. For example, most customer service teams use IT systems for efficient communication, issue resolution and feedback collection to ensure a positive user experience.
• Helps with education and research. IT plays a vital role in education, providing access to educational resources, facilitating distance learning and supporting research endeavors. Remote learning technologies enable access to education from anywhere, bridging geographical barriers and providing opportunities for lifelong learning.
• Provides cost savings. IT reduces costs associated with paper-based processes, manual labor and physical infrastructure, leading to significant savings for both businesses and individuals.
• Provides connectivity to the internet. Virtually all IT devices, many of which are part of the IoT, tap into the internet, which interconnects billions of devices worldwide.