Computer Changes and their Impact on Management

Computer Changes and their Impact on Management

The world of computers is a field that is not only very young, but is also rapidly changing. In one lifetime, computers have evolved from a multimillion dollar unit that filled entire buildings, to a few hundred dollar personal computer that fits on a desktop with more power than its predecessor. How does this change in cost, size and power affect our management decisions? To look at these areas, it should be understood that each characteristic not only makes a significant impact for management, but is enhanced by the other two changes.

The reduction in computer costs over time has the obvious implications of reduced overhead costs for a company’s management and possibly a smaller budget requirement for the information technologies department. Closer inspection of the lower computer costs shows that the reduced overhead can have a number of implications dependant on management decisions. One decision would be to show an increased profit on the end product’s margins. This makes stockholders very happy.

Management could also decide to provide more computer technology for the company without an increase in budget, or provide hardware with less compromise in functionality. The additional money could be used for additional specialty computer hardware that would not normally be purchased. A company would have to research whether the increase in computer technology would be able to provide the necessary competitive advantages or productivity increases. Management might also decide to take an exhaustive look at the entire company and its business process’ to determine if other areas might use the money for upgrades as well. These upgrades can be in the manufacturing process, research and development, sales, or in manufacturing to name a few.

The reduction in cost also impacts the reduction in size of the computer hardware which has been getting smaller and smaller. As the prices of computers have gone down, the manufacturers have been able to reduce the size of the computers dramatically at the same time. Management originally provided a computer that was very large with terminals provided to the user as an interface. Today we have a personal computer on almost every desk top. These units require less space allowing management the freedom to determine whether they wish to put a unit on every desktop. With the smaller space requirements and the changes in the hardware itself, management also has less impact to their facility requirements.