Informataion Systems in business

Topics: Enterprise resource planning, Management, Business model Pages: 5 (1555 words) Published: February 27, 2014
For every information system to run, data is needed. Data is unprocessed information or raw facts. Data cannot be used in the “raw” form because it has no meaning; therefore it has to be processed to create information. Information is processed data from which conclusions may be derived through a system. A system is a group of independent but interrelated elements. Therefore, an Information System is a collection of interrelated components that gather data, manipulate it and store it. It also gives a feedback to its objective. “An Information System is a System consisting of the network of all communication channels used within an organization.” ( Every business needs an information system to help it make sound decisions which helps decision makers achieve organizational goals. An example of a business information system would be an Entity Resource Planning system which is a multi-mode application software that helps manage the vital parts of a business. As advantageous as it can be to use an Information system in a business, many ethical issues arise too. This will be discussed further in this research paper. Importance of Information Systems in business

Improved decision making
Many managers never have the right information at the right time to make an informed decision. These poor outcomes raise costs and lose customers. Information systems make it possible for managers to use real time data from the source when making decision. For example, “Verizon Corporation uses a Web-based digital dashboard to provide managers with precise real –time detailed information on customer complaints and network performance. Using this information managers can immediately allocate repair resources to affected areas, inform customers of repair efforts and restore service fast.”( )

New products, services, and business models
Information systems help business firms create new products and services and new business models. A business model describes how a company produces goods and services, delivers them and sells them to create profits. Operational excellence

Businesses improve the efficiency of their operations in order to achieve higher profits. Information systems are needed in order to achieve high levels of efficiency and productivity in business operations. A good example is a business entity that uses a retail-link system; this is a system which digitally links its suppliers to stores. As soon as a customer purchases a good, the supplier makes sure that the good is replaced to the shelf.

Customer/supplier intimacy
When a business serves its customers well, the customers usually return and purchase more. This raises the firm’s revenue and profits. The more a business engages its suppliers, the better the suppliers supply. An example would be that of the Mandarin Oriental hotel in Manhattan, “The hotel exemplifies the use of information systems and technology to achieve customer intimacy. The hotel uses computers to keep track of guests' preferences, such as their preferred room temperature, check-in time, television programs etc.” ( ) Competitive advantage

When firms achieve one or more of these business its objectives e.g. improved decision making, operational excellence, new products, services, and business models, and customer/supplier intimacy, chances are they have already achieved a competitive advantage. Doing things better than your competitors, charging less for superior products, and responding to customers and suppliers in real time all add up to higher sales, and higher profits. Example: Toyota Production System focuses on organizing work to eliminate waste, making continuous improvements, TPS is based on what customers have actually ordered. ( ) Five areas of information systems needed by businesses professionals 1. Business applications

“The major uses of...

References: Microsoft® Encarta® 2009 © 1993-2008 Microsoft Corporation.
Fosser, E., Leister, O. H., Moe, C. E., and Newman, M. (2008).ERP systems and Competitive advantage: some initial result, (smartlog seminar 10.12.2008)(p. 22)
Conway, P., Associate Professor School of Information University of Michigan, (2010) SI 410 Ethics and information technology (p. 8)
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