As stated by Henry C. Lucas, Jr. and Margrethe Olson from NYU and the DMR Group in Australia:

“Information technology (IT) contributes to flexibility by:

1) Changing the nature of organization boundaries and the time when work occurs

2) Altering the nature and pace of work

3) Helping firms respond to changing market conditions

But, there are also aspects of technology which can decrease flexibility, and there may be second-order impacts of flexibility that are not easily predicted.”

Expenditures in the United States

In the United States alone, it has been estimated that capital expenditures for communications technology has reached over 1/3 of the total figure. This means that a sizeable chunk is being devoted to improving communication and data retrievable in businesses.

The picture has been optimistic since the dawn of the World Wide Wed, with the birth of decentralized data retrieval and data processing systems.

Uncertainty and flexibility

The issue in businesses is rooted in the uncertainty of doing business alone. The increased amount of expenditures in communications and other related technologies can be seen as one of the ways to safeguard one's business from financial harm.

In a world drawn completely to the centripetal movement of the global financial system, there is no clear indication what type of system would remain robust. In the long run, those who have been continually improving their systems will be the last to fall. This is manifested in the way the newer startups in the DOTCOM boom and bust have been able to roll with the tides.

Working with little capital, these small merchants have been able to brave and survive uncertain times by implementing strategic communication channels between buyer and seller.

Flexibility is the key term here, and is further is explained by Lucas and Olson:

“All of these observations suggest that flexibility is the ability to adapt when confronted with new circumstances; a flexible organization defends quickly against threats and moves rapidly to take advantage of opportunities. Flexibility provides the organization with the ability to adapt to change and respond quickly to market forces and uncertainty in its environment.”

The investments take shape

What kinds of investments are we looking at here? The basic premise is that these investments are intrinsically linked with the improvement of production. Production takes a lot of work; and is now being aided by the most powerful computer systems.

As stated by Lucas and Olson, even the mechanization of basic forms of data is part of the progressive turn to information technology:

“Significant IT investment is for basic mechanization of the records of production and distribution of goods and services (e.g., invoices) or for actions like themselves, electronic money transfer. Technology is also used for manufacturing (such as CAD/CAM) and computer-integrated manufacturing (CIM). A centralized database enables production and dissemination of information for management control as a by-product of mechanization.”