The Use Of Information Technology In Finance Essay Example for Free

The Use Of Information Technology In Finance EssayThe institution is continuously under the process of change, ever since its inception. This change has resulted into a derive of advancements. Science and Technology has been at forefront in bringing these changes with the aim to ease the life of the people. Despite, this world a regular process, the acceleration of the change brought by randomness technology in the last degree Celsius is second to n matchless. In the recent history, no other eye socket of science has affected so numerous diverse walks of life, as the information technology did. Now, information technology is considered as the lifeblood for each organization, offering whatever sort of product or service. Information Technology requirement is now considered the part of infrastructure for all sort of problem activity. Today, when we recall the spread of reckoner and information technology few decades down the shop lane, we find the quote of the IBMs pre sident in 1940s who said, I think there is a world market for ab pop five computers. However, if we see the penetration of information technology in any walk of life, we find our lives miserable without it, no matter to what discipline of study do we belong.I convey a finance major and the field of finance and its associated handle are no exception and these fields have potential to make the most of information technology resources available worldwide at this halt of time. Thus, this article is intended to explore the possible applications of information technology in the field of finance.To carry out this assignment, four modes of information were explored. These were web search, blogs, job search and articles. The web search was done through Google and Alta Vista. few of the keywords used are as followsIT and FinanceUse of IT in FinanceApplication of IT in the field of financeStudying Finance using ITfiscal SoftwaresFeatures of Financial SoftwaresHow IT supports monetary dec isionsFinancial ERPs etcIn caser of Blogs, a number of blogs were explored. Two of them arehttp//www.corporatefinanceblog.com/http//www.bilgilizce.com/lectures-on-corporate-finance/Following Job Sites were explored.http//jobs.jobbankusa.com/js/action/searchresults.asphttp//hotjobs.yahoo.com/The job requirements for the accounts manager, director finance, financial consultants, and business analysts were explored.The sites that were explored are CIO.com, BusinessWeek.com, ComputerWorld.com etc. The key words used were financial solutions, finance and technology etc.When we aim at finance, five discreet fields come to our mind. These are corporate finance, trade finance, personal finance, populace finance. Looking from broader perspective, the student of Finance also studies its associated fields like banking, investment, derivatives, risk management, stock trading, financial education analysis etc.Each of these subfields also has application of information technology. However, bef ore going into details, first of all, lets look at the application of information technology in the field of finance, generally. In the field of finance, one of the most sophisticated and crucial, yet crucial delegate is to develop financial models to analyze the feasibility of various alternatives from the financial perspective. Previously, these models were used to be developed manually. However, now with the help f sophisticated applications and opening move resource planning (ERP) softwares like Oracle Financials and the financial modules of SAP provide the competency to develop ones own financial model within no time.No doubt, still the logic needs to be created by the professional of finance, but now he does not need to worry about minor calculation mistakes, leading to highly misleading results, all he has to worry about is the logic behind the model, the accuracy and speed that the information technology provides in the development financial model increases the capa city of that financial professional. This was just one application there is a whole arena of services that information technology has to offer to the students and professionals of the field of finance.Even the spreadsheets like Excel mass provide the capability of financial functions like scenario planning, what-if analysis and so on. At the professional level, the use of databases, data warehouse and business intuition helps in stylus analysis through application of actually advanced algorithms in very spectacular amount of data which is next to impossible manually and totally impossible to be done manually, if necessary to be done in the same amount of time that is required by a computer for the same task.However, once more, computer is the machine the dependability of the results depends on the logic provided by the operator. But now, advanced computer applications such as artificial erudition, neural networks etc. have also a limited capability of learning from past and deducing logic. If these systems become reliable and full tested in future, these applications can revolutionize the world of finance as well.Now lets have a brief look at the application of information technology in various branches of finance. In corporate finance, two most important goals are to increase the corporate value and reduce the financial risk. Risk analysis and management requires the trend analysis of past data. As already mentioned, through the use of data warehouse and business intelligence tools, this task can be done very efficiently. A data warehouse contains the archived data where as business intelligence tools help to extract meaningful information out of it. Likewise, data mining tools can be used to identify the trends in the past data.In public finance, the scope is large, resources are very limited and alternatives are very diverse. Thus, it requires using techniques like what-if analysis, goal seeking etc. A crease of tools are available to carryout thes e tasks, ranging from Microsoft excel to custom developed ERPs. In personal finance too, the use of automated tools save time. Likewise, the trade financing needs careful forecasting, a number of tools are available for that too, again ranging from excel to neural networks. Thus, in todays job market, the more sophisticated the financial task is, the more technical skills are required by the company.To sum up, the field of finance can leverage upon the opportunities of ease, accuracy and speed provided by information technology in order to increase the efficiency, effectiveness and reliability of financial decision, as these decisions have significant impact on the financial health of the organization in professional life. In this connection, I belief that the student of finance must be well certain and well acquainted with the opportunities that information technology provides to the field of finance.BibliographyChorafas, D. (2007). Risk Management Technology in Financial Service s (Elsevier Finance). St. Louis Butterworth-Heinemann.Financial-i Awards Kyriba the 2007 Prize for Most Innovative Cash Forecasting Solution. (2008, Feb. 26). Business Wire, 23.Lee, J., Trippi, R. (2000). Artificial Intelligence in Finance Investing State-Of-The-Art Technologies for Securities Selection and Portfolio Management. Milwaukee Irwin Professional Publishing.(2008). Handbook on Information Technology in Finance (International Handbooks on Information Systems). New York Springer.