Information Technology is related to designing, developing and studying the information that is related to computers. It is significant in ensuring the smooth operation of all the departments in companies such as the finance department, manufacturing department, human resource department and also in security related functions. Through IT, the companies are able to get rid of errors in the proper operations of the tools used for designing and manufacturing purposes.
The IT organizations are squeezed in the grip of support and maintenance of ongoing operations. Some organizations are taking innovative and bold approach to their IT budgets by investing capital expense with the aim of offseting the high operating expenses (Essay Judge). The outcome is large upfront cash outflows with favorable effect on operating expenses. The financing enhances the acquisition of hardware, systems and application software, personnel and professional services as well as enterprise investment portfolio (Arestis P, Desai M & Dow S. Pg 91).
In developing countries, the firms operating in the information technology industries possess few tangible assets that can be leveraged as collateral for loans and they often operate businesses whose economics are not well understood. This challenges the accessing of growth capital (Academic Foundation. Pg 13-14).
Another challenge is the skills dilution whereby the proliferation of different hardware, operating systems and applications software forces the organizations to acquire and maintain skills across a wide range of technologies making it difficult to develop a critical mass of expertise and best practices that can be leveraged across the organization as well as staffing efficiencies (CIOs).
There exist some promoters who are able to cultivate a strong relationship with the venture capitalists or business angels, and who are able to gradually build a relationship of trust that could compensate for the other factors. However, high tech promoters tend to concentrate on technical aspects and are not inclined to creating of financing opportunities (Grossman T & Livingtone L. Pg 527).