Information Architecture is the structural design of information spaces. Why do books has a table of contents at the beginning and an index at the end? Why do web sites have banners at the top but the navigation menu is horizontal sometimes and vertical at other times? These are a few of the questions that information architecture addresses.
Information architecture covers a broad range of topics, from findability, web page layout, and the design of corporate taxonomies; to the larger issues of structuring entire intranets and providing consistency to the overall customer experience.
The techniques and methodologies of Information Architecture can be applied at any level. Just as a physical architect can design a room, a building, or an entire campus; information architecture can be applied to a presentation, a web site, an entire corporate intranet or any part thereof.
Information architecture is important because you cannot solve business problems in isolation. You need to understand, account for, and -- where possible -- influence the entire user experience to make sure both company and client have the most rewarding experience possible.
More writings about information architecture can be found on Andrew's blog.