The main reasons why companies face information technology challenges, especially in an increasingly competitive global economy, is because of the impact of change in information technology (IT) and globalization. According to economists, business cycles are characterized by a cycle called the Business Cycle, which goes through four distinct stages: crisis, expansion, decline and resurgence. As the name suggests, the business cycle is characterized by the tendency of firms to expand and invest their retained cash to increase market share and to reduce costs and reduce competition. With the spread of technology across the globe, it has become increasingly difficult for companies to foresee and plan for changes in information technology that will affect their competitiveness.
The effects of changes in information technology: can be either positive or negative. It all depends on the nature of the technology involved, which determines whether there will be changes that can be advantageous or detrimental. According to economists, the main three statements in the given five statements are describing the effects of changes in information technology for firms worldwide. The first statement is: “It has become increasingly difficult for companies to predict and identify potential threats.” Experts believe that this is the most important problem faced by companies today, as it is difficult for them to forecast the impact of new technologies on their competitiveness and future growth.
Secondly, the second statement: that summarizes the effects of changes in information technology for companies worldwide is: “The rapid pace at which information technology is changing also poses a threat to the competitive advantage of companies.” This is due to the fact that many companies have adapted to new technologies quickly, without learning from previous technologies. Some analysts believe that even if companies were able to adopt new technologies more slowly, they would still face significant challenges, as the rapid adoption of new technologies has reduced the price of computer systems and made it much easier to produce applications that require fast, distributed processing power. Experts also believe that there will be a gradual increase in the number of companies that are currently using information technology as an integrated whole.
The third and last statement is: “For companies worldwide, the most immediate effects of changes in information technology are changes in its workforce. As more companies move to have more employees telecommuting, those employees will be coming from other countries and having different cultural experiences. These individuals will need to be trained differently, in comparison to individuals who were born in the same country and have similar cultural experiences.” In order for companies to adjust to these different cultural experiences, a company will need to hire telecommuting employees who can speak the native language and adapt to the technological change that is taking place.
Experts believe: that the fifth and final statement would be one of the largest effects of such changes. It states: “In addition, some companies will experience an immediate need for more technical staff, especially in areas where a large part of the workforce is already located abroad. In some cases, companies will need to hire additional support staff as well – analysts, programmers, quality assurance, and testers.” The need for additional support staff could mean delays in certain processes or changes to work processes that will increase the company’s costs.
Experts note: that changes in information technologies are creating new employment opportunities. For the first time, many people can benefit from telecommuting jobs. The increase in the global economy would also mean more people are able to take advantage of better salaries. However, some countries would still struggle with employment rates and employment opportunities. There is also the potential decrease in competitiveness, while new businesses can expand and offer better services to customers.
Experts believe that the effects of these changes on the global economy are positive for everyone.
