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Why Business Need Information Systems

11 Mar

Many businesses today do not make use of internet which is very important in this day. Upgrading the computer information system is not an option in this technology-driven era, it is essential. The follow are reasons why businesses need to use information systems.

Operational Excellence:
In order for a business to achieve high levels of profitability, they need to improve the efficiency of their operations. Information systems is a tool that is used in order to achieve high levels of efficiency and productivity in business operations.

New Products, Services and Business Models:
Information systems can be used to create new products and services and also an entirely new business model. A business model describes how a company produces, delivers and how they sell a product or service to create wealth.

Customer/Supplier Intimacy:
When a business provides a good product or service customers tend to return and purchase more frequently which raises revenue and profits. The more a business engages with its suppliers, the better the supplier can provide vital inputs which can lower costs.

Improved Decision-Making:
Many managers who operation in an information bank may never have the right information at the right time to make an informed decision. This can raise costs and lose customers. However, information systems allow the managers to use real-time data from the marketplace when making decision.

Competitive Advantage:
When a firm achieved one or more of these business objectives (operational excellence, new products, services and business models, customer/supplier intimacy and improved decision-making), they may have a competitive advantage. By performing better than competitors, charging less for superior goods and responding to customers and suppliers, higher sales and profits can be made.

Day To Day Survival:
Businesses must invest in information systems and technology as they are essential to doing business. This necessity is caused by the industry level changes and firms need to use information systems and technology in order to provide the capability to respond to these.

Information systems enables companies to react, respond, cater, store, retrieve, disseminate and control their new valuable asset that is information. In the future, a good information system in a business will no longer be an option, it will become a compulsory in determining success.



Strategic Information Systems

5 Mar

A strategic information system are computer systems that helps companies change or alter their business strategy and/or structure. They apply information to strategic business opportunities in a way that has an impacts on the organization’s products and business operations.

Most information systems support business activities by automating business operations for better efficiency and effectiveness, but they do not increase the corporate profitability. These systems are simply used to provide the managers information for to ensure the smooth running of the business and for analysis to plan new directions. However, Strategic information systems not only has become an integral and necessary part of the business, they affect the profitability and growth of the company. They provide new markets, new businesses and affect other competitors.

Many organizations that have done substantial amount of work with computers since that 1950’s have long used the term “strategic planning”. This term is used for any computer development that directly affects the conduct of the business. If a manager is interested in the outcome of a systems development because they feel it would affect their profitability, then the system is strategic.

A strategic system matches the information services resources to the business strategic opportunities where the computer systems will have an effect on the products the business produces or the operation of the business. Planning for strategic systems is not marked on calendar cycles or routine planning, rather it is the effort that is required to have an impact on the competitive environment and the firms strategy at that time that the management wants to implement on the idea.

Strategic systems will be effective only if the company is able to gather data, evaluate possible equipment and software and manage the routine reporting of the status of the project.

The key features of a Strategic Information Systems are:

(1) Decision support systems that allows a company to develop a strategic approach to align Information Systems or Information Technologies within the business strategies.

(2) Primarily Enterprise resource planning solutions that integrates the processes of the business to meet the objectives of the enterprise for the optimization of the enterprise resources.

(3) Database systems that has the “data mining” capabilities can make the best use of the available corporate information for marketing, production, promotion and innovation. Strategic Information systems also identifies data collection strategies to optimize database marketing opportunities.

(4) The real-time information systems that maintain a rapid-response and the quality indicators.


How to maintain Information Systems

2 Mar

Organisations need to establish filing systems to accommodate the different types of records they need to keep. These files must be updated regularly and accurate to maintain the integrity of the files. A business might establish a centralised filing system where all there records are kept it one area or a non-centralised systems which are seen in departments within organisations who have control of their own records. These files can be paper-based (stored in cabinets), electronic (computer systems), stored in fixed filing areas (filing cabinets or compactus units) or in a portable filing system (can be easily moved from one area to another).

It is essential that computer operators and staff understand how to manage electronic files within the organisation, such as how files are named and how folders are used. How to organisation’s information is stored depends on the following:

The amount of information to be stored: Large amounts of information are easier to store in a computer database rather than a paper-based storage system. This allows many people to access the information easily, especially if the organisation is spread throughout various locations.

The size of the workplace/organisation: This refers to the size of the organisation and also the number of employees. A large workplace area has the ability to store paper-based information in filing cabinets or compactus units, whereas a small workplace area could store more information electronically or digitally. If an organisation has a large number of employees, the method of storing information depends on how many people need the information and where these people are located within the organisation.

How work is conducted: Some organisations are more electronically up-to-date than others and they tend to store information electronically rather than paper-based. If there are a large number of employees who operate outside the organisation, electronic information are digital communication are more suitable.

The amount of storage space available: If there is limited storage space, less paper files can be stored. Inactive or dead files would need to be identified and disposed of so as the storage space can be used most effectively.

How often records need to be accessed: Records that are used most often would need to be accessed easily. Paper-based files would be stored centrally if the workplace area is relatively small or stored non-centrally to give access to the relevant department. Information can also be stored electronically so as it could be accessed by all employees.

Security required:Paper-based information can be stored in a locked filing cabinet in a secure area or a locked room. Keys can be given to employees who have the authority to access these information. For electronic information, passwords would be required to restrict access and regular backing-up information would be needed in case of a power failure or a computer virus.

Cost of storage equipment: Computers and other electronic equipment are expensive and must be updated and maintain regularly whereas filing cabinets last for a long period of time and are one-off expenses.

Protection for environmental effects: All files must be protected at all times from fire, flood, theft, etc.


Stages in implementing an information system

20 Feb

The main goal within an organization when implementing an information system is to increase efficiency in organization activity by means of IT.
For example: automatic information processing, adequate information and document management.

The implementation stages of an information system includes:

Problem analysis and specification design: The IT team analyses and defines the problem accurately. However, the users have to describe their complete requirements or specifications. Therefore, the involvement of the organization in providing complete and precise specifications for its needs are essential. Incomplete requirements will lead to inadequate systems and disadvantages in resource allocation for both the IT team and organization.

Design and implementation of the application: This stage is performed by the IT teams based on the specifications required. This stages examines the “how to do” and “do it” by the IT team. This involves the architecture design, choosing programming languages and environments, application implementation and application testing.

System installation: This is performed within the organization as it takes into account the user feedback and, if necessary, make adjustments where it is required.

Maintenance: This stage comes after the system installation. It involves all the necessary operations in order to ensure that there is an efficient exploitation of the system within the organization and performs adjustments where it is required as well as developing the organization’s activity.


Advantages and disadvantages of information systems for businesses

16 Feb

Maintaining the latest information system involves five elements.
– Hardware
– Software
– Data
– People
– Process

The hardware must be reliable and maintain the ability to handles various workloads. Software must be designed carefully and evaluated in such a way as to maximise its effectiveness. All the data entered into the computer must be accurate. The people who maintain these systems must be highly skilled and knowledgeable enough to be able to handle the latest information systems, and the users must be taught how to operate the system.

There are many advantages of implementing information systems for businesses. It allows the user to access and to understand the information therefore allowing them to respond to information quickly and effectively. The user can get the most accurate and up-to-date information quickly which is very important for businesses as these decisions affect the business. In addition to this, information systems also allows users to alternate and present information, as well as perform different tasks.

However, there are some disadvantages of using information systems in businesses. One main problem is that information systems may not function properly which affects the running of the business. This can result in system break down, interrupting smooth operations and consumer dissatisfaction. Defective information systems can deliver wrong information to other systems which could create problems for the business and its customers. Information systems are also vulnerable to hackers and frauds.



Using Information Systems to gain competitive advantage

6 Feb

Technology has changed the way businesses operate today. This can be seen as manual processes are now automated, many methods of communications are now electronic and so on. The introduction of technology has enhanced the way we do businesses today. Information systems (IS) continuously evolves and offers more and more possibilities. Businesses must see that IS is not just a collection of information, it is much more than that, it is a tool used to enhance the operation of a business. These tools can be used in various ways and how it is valued depends on how the business utilizes it. The implementation of IS can give businesses a competitive advantage:

Enhance jobs:
By implementing IS, it can create more efficiency in the workplace. This will reduce the time involved in processing thus allowing the employees to move onto more important tasks. The staff will no longer have to spend hours sorting through documents, data and other information.

IS allows the business to stand out from its competitors. Information systems can be used in such a way that consumers can be offered that no other competitors can provide. With this, it can attract new customers making the business more profitable.

Coordination of supply and distribution:
The use of IS can allow businesses to measure the level of stock, track orders and manage their entire supply chain. This can facilitate managers the ease to identify any problems and solve this before it can become a major and costly issue.

By integrating the business processes with the internet, it can generate efficiency, effectiveness and enhancement at the same time. This can enhance the customers experience when they shop online improves the performance of the business.

In today’s competitive environment, managers need to make quick and effective decisions. The use of IS can benefit managers as it provides up-to-date information which is used in the decision-making process. With all the information available, managers can decide which action to take.

Information systems can effectively and efficiently share information within or outside a business. These information are crucial as they are used by managers for making major decisions in a business.


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