Effective Use of Information Resources Is Necessary for Success in a Global Economy - Essay Example

Information resources are useful components in any business. Information resources in business is important because without the necessary information, an organization will operate blindly. The businesses will have no idea of customer preference and the emergence of new trends that are improving markets, which is likely to result in massive losses for such a company. The definition that comes to mind when an individual mentions information resources are the IT systems. Most companies use the IT and related resources in its operations to give it an edge over competitors (Shapiro and Varian 2013, n.p). Not all companies use the information technology and information systems in their operations. Some of the companies are doing just fine without the system. It brings to question the importance of the information resources. In this essay, I will critically analyse the statement “Effective use of information resources is necessary for success in a global economy". Is the statement true to many or is it the opinion of one individual?

Potters five forces model is an example of how the information resources can be used strategically to propel a company into success (Pearlson and Saunders 2009, p.53). The design covers all the problem areas a business can face in a business market. The threat of new entrant, the bargaining power of the buyers and the suppliers and the threat of a substitute product are imperative analyses in any business. The problems as presented by Potters model are every businesses nightmare every single day. Most companies spend most of their time struggling to stay ahead of the competition while identifying new threats. They do this to remain relevant in the market. The model addresses the importance of information resources in the different problem areas a business is likely to have. For a company to know its bargaining power, the supplier and buyer research needs to be done and customer and supplier trends studied to know how much they could pay. In the event of a threat of a product substituting the company’s product, the firm needs to collect information on the new product and if it can render them obsolete and in what way so that they can better their product. New competition is always there in a market. The secret is to have a strategic advantage that is unique and this takes proper research and analysis of data in the global market.

According to Davenport (2013), a company has to inform its users of its services by providing updated information regularly. Having its profile, product and services lists accessible to the user invites new users to the enterprise. With the internet age, every company should have an online platform for its residents where people can learn more about it (Meske and Stieglitz 2013, p. 62). An information resource is vital in this particular aspect. Giving an example of a company that has an online platform is like listing all of them. In the current society, it is safe to assume all businesses have adopted the online platform in their marketing strategies (Siemens 2014, p.1). The internet is the place most people search for information and clarification. It is a digital encyclopaedia with added advantages.

Information resources do not limit itself to the technological aspect of business. Information resources contain people and other business processes and functions (p.49). People act as assets to the company with capabilities that can help the organization in the global economy. In a global economy, an organization needs all the resources and information to keep abreast of the situation. The success of most organizations is based on how well they can use the information they have received and how they interpret it to serve the company regarding profit, product and service diversity and customer satisfaction. An example is Apple, a corporation whose use of information technology, people and information has seen it come up with better ways to keep its products interesting and unique while satisfying consumer needs (Hitt, Ireland and Hoskisson 2012, p. 16). Mithas and Sambamurthy (2011, p.237) define this correctly in their article. They talk about the importance of information and the benefits it gives a firm if handled correctly. Information needs to be managed if it is to have any value in a company. If properly maintained, the rewards to the company are enormous.

Technology is one of the factors that shape the global economy in the world today (Fischer and Fröhlich 2013, p.73). The shifts, developments medical breakthroughs and so forth direct individuals towards the benefits of information technology. With the current society addicted to their smartphones, what better way to reach them than integrating technology in organization day-to-day activities? According to Pearlson and Saunders (2009), information technology integrated with business strategy gives the enterprise an advantage over its competitors. Their explanation clearly shows us the essential need for information and how information resources can be used strategically. For instance, Zara has an information system that is automated to its headquarters in such a way they can track their sales and be in a position to monitor their sales and customer preference (Pearlson and Saunders 2009, p.46). In such a situation, Zara has an edge over the other retailers because she knows things the customers like and move off the shelf fast.

The changing shifts in global market prices that can plunge an economy and sink many businesses is one of the reasons for a company to use its information resources (Pearlson and Saunders 2009, p.295). Financial crisis can occur at any time due to some factors that are controllable or uncontrollable. After a financial crisis, most businesses take the time to recover and the countries suffer from the aftermath. The financial crisis of 2008 is an example of the issues and problems that face a company during a financial crisis (Savona, Kirton & Oldani 2011, p.3). The diversity of products in the market has brought a variety of prices in the process. Different businesses manufacture the same products with a difference in quality and price. Most companies have opted for information systems that they can integrate into their business strategies and company policies to remain productive and competitive. Accounting information systems are an example of information resources that work in a financial system. The Bank of Scotland is a case of a monetary institution that suffered during the great financial crisis and maybe this with the use of information technology and information systems would have been avoided (Rayner 2008, p.1). According to Ceran & Konya, Accounting Information Systems (AIS) are systems that transform the data from financial transactions into reports of information that can be used to plan and analyse a business (2016, p. 296).

However, not all authors support the theory that information resources, when used efficiently, are necessary for success in the global economy. Juiz and Tommy (2015) argue that the use of IT can prove devastating to a business if not handled properly. It is a powerful tool and sometimes it can work in favour or against the firm. It can result to the ill-timed unveiling of services, which will not be received well in the market by the customers leading to massive losses for the enterprise (Pearlson and Saunders 2009, p.60). The businesses suffer and in some instances declare bankruptcy and close shop. In such a case, the information resources do not serve as propellants to the global economy. They act as destruction tools. They analyse data and generate misleading information and since the firm trusts their information technology platform, they do not question the results (Smith 2016, p. 23).

If a business grows, its competition is likely to feel challenged and investigate the reason for their success. Implementation and use of the information resources attract the bigger competitors into doing better. The information resources offer companies with an edge over its competitors (Rainer & Cegielski 2011, p. 45). However, most of the companies’ advantage does not last for very long. The new and old competitors eventually catch up with the technology or come up with their better strategies that oust the original big wig in the department. In the end, they dismiss the primary leader and take his place. In this case, the information resource did serve its purpose but it was not a necessity for success. For example, FedEx and UPS are examples of competitors who use technology to improve their parcelling services (Pearlson and Saunders 2009, p.68). FedEx developed its services by creating a system that enabled its consumers to track their parcels online. UPS did not let this slide and they implemented the same strategy and made it better.

New information is relevant in a global economy and the information resources are areas where a business can get creative and current information. Conversely, for new data to be relevant, a business has to know when to show their cards and when to wait. Information resources either make or damage an enterprise (Marchewka 2014, p. 183). A business needs to be in a position to use the information and technology it has gathered to grow. According to Pearlson and Saunders (2009), ill-timed delivery of information may be damaging to a company because the consumers may not be ready for the advanced services or new products.

Information resources are necessary for everyday operations. Without information, a company is blind and it cannot serve its customers as is expected. Consequently, to achieve success, a company needs to use its information resources to gather information on relevant areas. The company needs to tap into the knowledge of its employees to use their creative ideas and establish new ideas (Bran & Popescu 2015, p. 40). However, information is not always all good if utilized correctly. Malicious individuals can alter or modify Information to suit their malevolent individual needs. Wrong and untimely investments are often a result. The investors lose huge chunks of money because they relied on information to make their decisions. Some of the information is relevant but not for the current customer needs (Venkatesh, Thong and Xu 2012, p.159). Some of it requires unveiling later where the consumer is likely to accept the product.

Success and loss go together in any business. Every time a company experiences high returns in a particular department, it suffers a loss in another. Information systems are good and can lead to success but they can also result in a loss (Ren & Dewan 2015, p. 80). For instance, you implement an IS in your company but in doing so, fail to adhere to the recommendations of the supplier. The result is wrong information meaning the products and services are likely to lead to vast losses. According to Tarafdar, Pullins & Ragu-Nathan, bad implementation of information systems leads to losses, which may be regarding defective products or crippled services to the clients who will not be impressed and look for an alternative (2015, p. 110). Nike and Hershey's Foods are perfect examples of poor implementation of the IS (Pearlson and Saunders 2009, p.68). The two companies had their businesses and services disrupting resulting in enormous losses when they tried to make their work easier by integrating information systems with their strategies of operation.

People will remain the same similar to information technology tools. The information will change while people and machines will depreciate. Information resources remain relevant over a period until a better idea emerges replacing an initial solution or suggestions (Pearlson and Saunders 2009, p.52). The things that people did not appreciate in the 90s are now hitting it off in the markets all over while some of the products and services became obsolete. The value of information is priceless but at the same time, information resources do not last forever. Better versions are emerging and keeping up with the trends and is proving to be quite expensive for most firms.

All factors considered the issues supporting the theory and those against it have given me a better understanding of the theory. Information resources are necessary for success in an economy because without these resources, companies do not have a way of collecting and relaying data timely to their different branches or the manufacturers. Besides, it will slow a company’s growth and render it obsolete. Information used appropriately and shared as required with the relevant individuals is a powerful tool in any business. The argument against information as a requirement for success when analysed has logic and meaning in it and can guide a small firm as it grows and adopts information technology and systems in its business policy.