What is Business Infrastructure? | Importance of Infrastructure in Business
About Business Infrastructure
Business infrastructure is the framework and systems that facilitate the functions of a business. The infrastructure of a business includes the internal physical systems and the external physical and electronic systems that support the business.
The various systems that make up a company’s infrastructure include infrastructure management, database management, customer relationship management, and project management.
The business infrastructure also includes a set of agreements, standards, and regulations that supports the operation of a business. The infrastructure also includes the IT systems and partnerships that support the enterprise.
The infrastructure as a whole is essential for any business to be successful. Without this support, a business cannot operate efficiently and will experience challenges. The issue of infrastructure is not just a recent phenomenon.
What is Business Infrastructure?
Business infrastructure is the physical and organizational structures that a business uses to achieve its objectives. It typically consists of but is not limited to, such things as buildings, information technology (IT) systems, management systems, and supply chains.
Business infrastructures are vital for the success of a business and continue to evolve and change over time, sometimes dramatically.
The term business infrastructure has been used by various fields over the years, each with its own definition of what comprises a business infrastructure. Business infrastructure as comprising five components:
- Information technology.
- Physical facilities
- Human resource management systems
- Financial systems/planning
- Operational control/management systems
Modern business technology infrastructure relies on virtualization, cloud computing, and outsourcing of complex tasks to third-party service providers. This raises a number of important issues for businesses.
In the past, large organizations often maintained their own IT infrastructure, which was relatively isolated from other departments or organizations within the business.
For example, an organization might own its own data center that houses IT equipment such as servers and storage systems. Additionally, an organization may purchase its own computer servers from a manufacturer such as HP or Dell and deploy them into their data center.
It can also comprise data processing and communication infrastructures within enterprise architecture
However, some businesses have an exclusive focus on only one aspect of their infrastructure rather than a multi-faceted approach. For example, some companies may only operate a network of retail stores and have no separate manufacturing plant infrastructure.
Importance of Infrastructure in Business
The main benefit from a company’s infrastructure is the positive effect on its productivity and efficiency; however, some organizations view their business infrastructure as a barrier or inhibitor to performance.
A poor business infrastructure can lead to operational inefficiency, increased overhead costs, and operational delays. It can also result in a loss of market share and reputation.
The main reason for this is that an infrastructure failure could cause a significant disruption in business processes and operations, especially for those organizations that operate with lean production models.
Some IT analysts contend that the advent of technology alone has reduced the importance of physical business infrastructure, where “in-house” solutions have proved to be more efficient for most businesses.
Consequently, “outsourcing” of technology-based infrastructure services has become a popular trend among small and medium-sized organizations.
The benefits of outsourcing business infrastructure are now often referred to as “outsourcing of the infrastructure” or “the infrastructure”. Tech giants, such as Amazon.com, eBay, and Google, have significantly expanded the use of their own business-specific cloud services.
Example businesses infrastructure systems deployment
The concept of virtualization has been widely used in the IT industry to create greater flexibility and manageability within infrastructure services.
Virtualization can be considered a type of infrastructure service in itself, as it is an abstraction that enables the efficient provisioning of many different kinds of services. The use of virtualization has augmented the capabilities of cloud computing, allowing it to be used for more than just simple IaaS.
Cloud computing is now seen as a natural progression from virtualization technology. Cloud computing provides greater scalability and flexibility for IT resources compared to traditional business infrastructure models.
Cloud computing represents a new way of providing IT infrastructure services for both large and small organizations.
The concept of a mobile workforce has become increasingly important in business infrastructure. Mobile workers have become a necessity in the modern workplace, and the use of mobiles within the business will continue to increase during the next few decades.
Mobile means different things to different people. For example, a business may have employees working in various locations, which need to collaborate with each other as well as other external partners.
These employees may need to be able to access necessary data and information from their mobiles, which may be provided by the infrastructure provider. In this way, mobile business infrastructure requires the use of mobile IT infrastructure.