Why are information systems so essential to business?

18 Feb

To expand on my last post, I will talk more about how important information systems are in everyday life- most importantly business organisations.  They are essential for many operations within a business, from basic operations to achieving competitive edge!

Business Organisations invest heavily in information systems to achieve six strategic business objectives:

1)      Operational Excellence:

Information systems and technology are important in making a business highly efficient, and with efficiency comes greater productivity and so the business will become more profitable.

For example an information system automatically re-ordering stock from suppliers when stock is running low rather than employing someone to check stock levels.

2)      New products, services and business models

Information systems and technology are tools needed for new products, services and progression- for example from CDs to buying music online.

3)      Customer and Supplier intimacy

Information systems make it easier for businesses to directly target their customers, making their relationship stronger, For example the use of loyalty cards makes it so easy for businesses to know what their customers buy & how to advertise to them.

4)      Improved Decision Making

With information systems providing businesses with more knowledge, they can then make more informative decisions. For example what lines are doing well/ badly and what lines to add or discontinue.

5)      Competitive Advantage

Information systems help businesses gain competitive edge over their competitors. For example businesses with improved efficiency can deliver better performance & sometimes charge less for superior goods.

6)      Survival

In some cases businesses may need to invest in IS just to survive with technology improving so quickly. For example soon, all supermarkets may have to introduce self- service checkouts.

These are just some reasons businesses invest in IS. Thanks for taking the time to read!

One Response to “Why are information systems so essential to business?”

  1. sad111343201 February 18, 2013 at 11:06 pm #

    Very interesting🙂

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