The role of information systems in business today
The following roles are played by the information
system in todays world -Transforming Business
We can see the results of the massive spending on
Information technology and systems around us every
day by observing how people conduct business. -
Globalization Opportunities the emergence of
internet into a full-blown international
communication system has drastically reduced the
costs of operating on a global scale.-The Emerging
Digital Firm a digital firm can be defined along
several dimensions. A digital firm is one in which
nearly all of the organizations significant business
relationship with customers, suppliers, and
employees are digitally enabled and mediated.-
Strategic Business Objectives of Information
Systems There is a growing interdependence
between a firms ability to use information
technology and its ability to implement corporate
strategies and achieve corporate goals. Business
firms invest in heavily in information systems to
achieve six strategic business objectives -operational
excellence -new products, services, and business
models -customer and supplier intimacy -improved
decision making -competitive advantage -survival.
Business processes, refer to the manner in which
work is organized, coordinated, and focused to
produce a valuable product or service. Business
processes are workflows of material, information,
and knowledgesets of activities. Business
processes also refer to the unique ways in which
organizations coordinate work, information, and
knowledge, and the ways in which management
chooses to coordinate work. How information
technology enhances business process, efficiency
and transformation primarily in two ways:
increasing the efficiency of existing process and
enabling entirely new processes those are capable of
transforming the business. Information systems
automate many steps in business processes that were
formally performed manually.
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Dimensions of Information Systems
Organizations Information systems are an integral
part of organizations. Organizations have a structure
that is composed of different levels and specialties.
Their structures reveal a clear-cut division of labour.
Authority and responsibility in a business firm is
organized as hierarchy, or a pyramid structure, of
rising authority and responsibility. -Management
Managements job is to make sense out of the many
situations faced by organizations, make decisions,
and formulate action plans to solve organizational
problems. Managers perceive business challenges in
the environment; they set the organizational strategy
for responding to those challenges; and they allocate
the human and financial resources to coordinate the
work and achieve success. Throughout, they must
exercise responsible leadership. -Technology
Information technology is one of many tools
managers use to cope with change. Computer
hardware is the physical equipment used for input,
processing and output activities in an information
system. Computer Software consists of the detailed,
preprogrammed instructions that control
coordinate the computer hardware components in an
information system.
Systems from functional perspective -Sales and
Marketing Systems The sales and marketing
function is responsible for selling the organizations
products or services. -Manufacturing
Production Systems the manufacturing
production function is responsible for actually
producing the firm's goods and services.
Manufacturing and production systems deal with the
planning, development, and maintenance
production facilities; the establishment of production
goals; the acquisition, storage, and availability of
production materials.-Finance and Accounting
Systems The finance function is responsible for
managing the firm's financial assets, such as cash,
stocks, bonds, and other investments, to maximize
the return on these financial assets. The finance
function is also in charge of managing the
capitalization of the firm. Human Resources
Systems The human resources function
responsible for attracting, developing,
maintaining the firm's workforce.
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Information System An information system can be
defined technically as a set of interrelated
components that collect, process, store and distribute
information to support decision making and control
in an organization. In addition to supporting decision
making, coordination, and control, information
systems may also help managers and workers
analyze problems, visualize complex subjects, and
create new products.
IT Isnt Just Technology: A Business Perspective
on Information System Managers and business
firms invest in information technology and systems
because they provide real economic value to the
business. The decision to build or maintain an
information system assumes that the returns on this
investment will be superior to other investments in
buildings, machines, or other assets. These superior
returns will be expressed as increase in productivity,
increases in revenues (which will increase the firms
stock market value), or perhaps superior long-term
strategic positioning of the firm in certain markets.
We can see that from a business perspective, an
and
information system is an important instrument for
creating value for the firm. Information systems
enable the firm to increase its revenue or decrease its
costs by providing information that helps managers
make better decision or that improves the execution
of business processes.
and
Systems from a constituency perspective -
and
Transaction Processing Systems(TPS)Operational
managers need systems that keep track of the
elementary activities and transactions of the
organization, such as sales, receipts, cash deposits,
of
payroll, credit decisions, and the flow of materials in
a factory. -Management Information Systems
(MIS) and Decision Support Systems (DSS)
Middle management needs systems to help with
monitoring, controlling, decision making, and
administrative activities. In Chapter 1, we defined
management information systems as the study of
information systems in business and management. -
Executive Support Systems (ESS) Senior managers
need systems that address strategic issues and long-
is
term trends, both in the firm and in the external
and
environment. Executive support systems (ESS) help
senior management make these decisions.