Analyzing the Role and Financial Impact of IT in Smart Firms

This report examines the role and financial implications of various IT technologies in smart firms. It focuses on the costs associated with implementing technologies like agricultural robots, augmented reality, virtual reality, drones, sensors, and big data analytics. The report highlights the significant initial investments required, such as $130,000 for a team of agricultural robots and the ongoing expenses for maintenance and operation. It discusses the benefits of these technologies, including improved efficiency and reduced costs, while emphasizing the need for careful financial planning and IT governance. The report concludes by underscoring the financial risks involved and the importance of minimizing these risks to achieve the desired outcomes from IT investments in smart firms, stressing the need for effective IT governance plans for each technology discussed. The analysis includes costs related to sensor installation, drone maintenance, and big data integration, as well as the need for skilled IT teams to manage these complex systems effectively.

Running head: ROLE AND USE OF IT IN SMART FIRMS
Role and use of IT in smart firms
Name of the Student
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1ROLE AND USE OF IT IN SMART FIRMS
1. Introduction
The foremost determination of this essay is to focus on a significant issue or business
problem due to the use of different categories of IT technologies such as data analytics, robotics,
and virtual reality.
The extensive developments in the field of Information Technology has resulted in the
development of many new technologies such as augmented reality and virtual reality (King,
2017). The application of these latest technologies can be very much useful for most of the
corporate business organizations, at the same time these technologies had a positive impact on
the smart firms also (Lowenberg-DeBoer, 2015). The products and services offered by the smart
firms have been enhanced due to the use of these technologies, at the same time it can be said
that the along with the positive impacts there are numerous issue associated with the use of these
technologies also such as the huge initial investments required from the management of the smart
firms and the need of maintaining high end IT experts so that they can deal with the challenges
thrown by these technologies during the working hours (Stehr, 2015). The most significant
problem associated with the use of these technologies which will be discussed in this paper is the
huge financial resources needed from the management team to incorporate the technologies in
the working environment and the cost needed for maintaining these technologies.
2.1 Use of robotics for livestock management
The use of agricultural robots for livestock management requires a team of robots which
can be hired from global IT organization. There are huge investment costs required for those
agricultural robots and also for their maintenance (Tripicchio et al., 2015). The amount can be
paid both in monthly basis as well as annually. A price of $130000 is required to purchase a team

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of four robots (Rao, Gopi & Maione, 2016). The agricultural robots are very much used to
monitor the weed control, environmental monitoring and cloud seeding.
2.2 Use of augmented reality of virtual reality technologies
The use of the automated technologies in smart firms such as the driverless tractors
involves huge amount if cost which has to be sanctioned by the senior management team of the
smart firm. The automated technologies can be also very much beneficial to reduce the other
different types of cost associated with the agricultural industry such as the operational costa and
the overhead costs (Kamilaris, Kartakoullis & Prenafeta-Boldú, 2017). Numerous vehicles are
required in a particular smart firm. Each of the driverless tractors requires about $2700 which are
very much beneficial for the optimization of the services provided by the smart firms.
2.3 Use of drones for monitoring and maintenance
The use of the drone facilities in the smart firms can be very much expensive for the
management team as it requires huge investment over a period of time. The abilities of the
drones can be modified using the frequent investments which are needed to be done by the
management team of the smart firms (Lum et al., 2016). A minimum of $100000 USD is
required in a year to maintain a drone in smart firms. Considering the use of the drones in the
agricultural field it can be said that the use of the fertilizers and the pesticides can be also
monitored and managed as it can be provided by the live video footages (Lokers et al., 2016).
There are numerous technical issue associated with those drones also which comes up months
after it has be installed, these issues can be solved using the investments coming from the
management team of the smart firms.

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2.4 Use of augmented reality of virtual reality technologies
The use of sensors includes different categories of costs which can be paid both monthly
as well as annually. The average cost of sensors is about $1.30 in the year 2019. The use of the
sensors requires numerous difficulties such as moisture control and heat control. There are
separate cost for the motion sensors which are increasingly used in the smart firms (Veroustraete,
2015). The Infrared sensors which are used in the smart firms are very much cost in nature as
compared with the proximity sensors. In few mixed farming fields, temperature is needed to be
controlled using the temperature sensors, the installation of the temperature sensors requires
huge investment which is a very big business issues for the shareholders of the smart firms
(Bendre, Thool & Thool, 2015). The microcontrollers used in the smart sensor are also very
much expensive in nature and there are compatibility issues associated with smart sensors. Costs
are needed to be cut so that the desired results are obtained from these technologies.
2.5 Use of big data for decision making
The recent developments in the field of Information Technology have resulted in the
growth of new technologies such as big data technologies. It can be said those other different
categories of technologies are also used with the big data technology such as data mining
technology. The smart firms have numerous categories of data such as the structured and the
unstructured data (Bronson & Knezevic, 2016). The raw data of the smart firms are the
unstructured data, the use of the big data technologies can be very much useful to protect both
the raw data as well as the structured data in a useful manner. The application of the big data
technology is a huge source of concern in the smart firms as it requires a minimum of $19000 to
$25000 USD. Along with the money which are needed to be spent for the incorporation of the
big data in the smart firms, effective communication between all the stakeholders of the firms are

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also very much recommended between the different categories of stakeholders (Wolfert et al.,
2017). The valuation of the big data technology in done considering the terabyte of data which
are stored in an annual basis. Cloud services are also very much beneficial for protecting the
agricultural data from the different categories of security attacks such as the ransomware.
2.5.1 Use of augmented reality of virtual reality technologies
The cost of using augmented reality increases in a parallel manner with the increase in
the area of the smart firm. There are numerous categories of investments required for the
incorporation of this technology in a smart firm. The benefits which are supposed to be obtained
from using these technologies such as the reduction of the agricultural risks depends upon the
amount of spent which are spent for modifying the virtual reality technologies (Santana-
Fernández, JGómez-Gil & del-Pozo-San-Cirilo, 2014). At the same time, it can be said that
separate investments are required for the training purposes as there are various complexities with
the use of this technology. The smart firms using the virtual reality in their working environment
should be having a dedicated Information Technology team which can work regarding any issues
with the technology.
3. Conclusion
The paper concludes the financial issue of smart firms due to the use of different
categories of technologies such as big data technology and virtual reality. The costs involved
with each of the technologies have been also stated in the paper. A huge one time investment of
$130000 is required to incorporate the agricultural robots in the smart firms, the use of virtual
reality technologies can also require a minimum effort of $2700 per month. The paper helps us
determine the cost associated with the use of the drones in the smart firms which requires a
minimum investment of $100000 USD in a calendar year. There are numerous costs associated

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with the use of the smart sensors such as the infrared sensors and temperature sensors in the
smart firms, each sensors have unique specialization which are used in the smart farms. The
average cost of installation any category of sensors in the smart firms is about $1.30 USD. The
paper also highlights the cost needed for the management team of the smart firms who wants to
introduce the big data technologies in their working environment, it can be said that a minimum
of $19000 to $25000 USD is required to incorporate the big data technologies. All these
categories of risks has to be minimized in the first place so that the desired results are obtained
from these technologies, at the same time it can be also said that proper IT governance plans are
also needed for each of the above discussed technologies. Thus, this paper is very much useful
for the readers to understand the financial risks involved with each of the latest development of
the Information Technology.

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4. Reference
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King, A. (2017). The future of agriculture. Nature, 544(7651), S21-S23.
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