Effective and Efficient Usage of Information Systems and Technologies - Research Paper Example

Full topic and Section # of Effective and efficient usage of Information Systemsand Technologies can help build a competitive advantage over opponents. It helps create a strategic advantage over fellow companies because of the increasing importance of information in today's world. By successfully implementing and managing information systems in a in organization, one can create enormous proficient benefits for the organization. INFORMATION SYSTEMS Information systems can be termed as the combination of software and hardware that helps in processing and managing data and information in organizations. This system is a automated or manual system that may comprise of people, machines or methods that have been organized to collect, process, transmit and disseminate the information. Information systems are usually confused by management information systems. However, MIS strictly refers to the management of information systems whereas information systems include systems that include decision making as well. ROLE OF INFORMATION SYSTEMS IN GAINING A COMPETITIVE ADVANTAGE In today's every growing fast paced world, information is termed valuable more then any other tangible asset. The reason is that information systems have slowly and gradually taken over the decision making responsibilities from human beings. In this 'Information Age', these systems have become the basis of conducting efficient business. In today's world, the environment changes every other day. With the changes taking place everyday, it is a requirement for the companies to continuously collect and manage information so that they may be better informed then their competitors. This will lead to the development of a viable advantage that will help organizations in better decision making. Gaining competitive advantage over competitors and rival companies is one of the major strategies that can help companies excel in the long run. The question arises that if the application of IT really provides a competitive edge to organizations. Answers to this question have been discussed and explored over many decades and it will be explored for the many years to come due to the ever-changing and evolving economic conditions of the world and transformation of industries. Due to these explorations, we have found out that usage of information technology effectively in organizations can create legendary results. Examples include the American Airlines Sabre System for traveling reservations, the FedEx's suite of tracking shipments and packages and Amazon.com's approach to internet based retailing. All the above mentioned examples have put forward the idea that information technology can help serve as a competitive advantage if it is used to leverage operational and organizational activities and support the collection of critical data at the right time. COMPETITIVE ADVANTAGE IN HEALTHCARE ORGANIZATIONS Information Technology soft wares and systems are tremendously used in today's health care organizations to manage the extensive amount of data and analyzing it critically to help benefit the patients, staff, doctors and the overall organization. The basic idea is not applying the system; however, competitive advantage is gained depending on three factors. These factors are how the system is implemented, whether the implementation done was cheaper or not then the competitors and the strengths of the organization's technical and IT staff. Effective implementation of IT in an organization can make the programs used in the organization faster, less prone to error and convenient. For example, accounts receivable applications have made the collection A/R processes faster, economical and less expensive. To improve organizational performance the right kind of information system must be implemented. The leverage of the processes is the most effective when the process on which the technology is applied are core processes that customers usually use to gauge the performance of an organization. For example, a hospital's efficiency maybe gauged by judging how the ambulance system is performing, or the billing procedures rather then its human resource or accounting processes. IT can be applied to effect significant process improvements if processes are chosen wisely, defined correctly and re-engineered skillfully (Wager, 2005) Usually in organizations, the critical elements of their plans, operations and environment are clearly defined. These critical points should be monitored constantly to ensure the effectiveness of the system, the smooth flow of information throughout the organization and to guarantee better health care and service activities. For example, bar code scanners constantly inform producers about the purchases that are being made and can help in ensuring that the valuable shelf space if optimally filled with the right mix of products and cab also help in the betterment of the inventory management systems. The rapid and accurate gathering of data maybe the most significant and important source of a competitive advantage (Wager, 2005). The accuracy of data is relative i.e., it is different for different organization. For example, in hospitals having good data about referring physicians maybe more important then an error-free registration process. Or knowing the demographics of your customer may be more important then a well run inventory system for many organizations. Hindrances that are present while using information technology systems are many and rapid and accurate provision of data is not easy. The data might not the complete e.g., incomplete medical records of a patient. Examples of Using IT as competitive advantage have shown us that it is a process improvement and rapid and accurate stipulation of critical information. It has also taught us that that competitive advantage does not come from the application systems and it is the application and the relevancy of the information system that matters. The idea is to obtain and sustain a competitive advantage. In short, technology cannot overcome poor strategies, organizational limitations and implementation plans, it is not magic. To sustain the competitive advantage one should go beyond the reach of the competitors and leverage some other assets that are not under the reach of the competitors. Such assets are market share, proprietary know-how etc. Conclusion: Information Technology can serve as an accommodating and useful tool in an organization's effort to achieve competitive advantage (Wager, 2005). This can only be achieved when an organization uses these information technology systems to increase leverage in the core organizational processes and its sound ability to collect critical data at the right time. Information technology cannot be used to uproot deeper organizational problems and the technology itself is not the solution but its implementation is what matters. The usage of IT to improve performance is a never-ending undertaking (Wager, 2005) INFORMATION TECHNOLOGY IN THE SERVICE INDUSTRY Information technology plays a vital role in gaining a competitive advantage in the service industry as well. Information Technology infrastructure in service industries is used to gain a platform for increased innovation, lowering the cost of production and helping the timely development of new and improved services. Moreover, IT has been used to extensively increase the leverage and to extend the scale of economies present in the industry. This is done by building volume, or size or any other asset or resource into an important resource barrier for competitors. Travel Agents and Travel Agencies Travel agencies serve as intermediaries between travel services such as airlines, hotels etc and customers. They are a part of service industry and provide with a intangible output of information and guidance. The success of travel agencies and travel agents depends upon how important the information and services then provide are important for the customers. If the information is vague or unclear, it might not help the customers and eventually this will lead to failure in the achievement of goals. Changes that have taken place over the years have significantly changed the nature and value of information in the travel industry (Clemens, 1991). This consequently has resulted in changes in the roles of travel agents. In the environment before deregulation, the travel agents primary responsibility was to provide the customer's with tickets and suggestions on tourist destinations. Business traveling was present but it was not as important as it is in today's world. Deregulation changed everything. Travel agents became the key performers in managing the complexities of purchasing travel services. Traveling through business class increased making corporate management a very important part of the market segment for the travel industry. Travel agents were greatly affected by the changes that took place in the business travel. Deregulation greatly increased the importance of IT in the travel industry. There are considerable economies to scale present in the travel agents industry. They exist primarily in the corporate level travel management. The driving forces behind these economies to scale are information technology as well as the ability to increase the leverage of purchasing power through negotiation and risk inventory. The suppliers of the travel agencies who favor most from these changes that have taken place are the airline computerized reservation systems. Over 93% of travel agencies use a CRS (Clemens, 1991) The market of customers is usually divided into three segments: corporate, leisure and incentive travel. Leisure market consists of individual who are most responsive to cost changes and flexible to time changes to save money. The meetings and incentive market is almost similar to the corporate market however this one requires more co-ordination between various people and elements. Purchasing power is of equal importance in this category. Corporate level is the most important market segment for the travel agency industry. It is estimated the firms spent over $115 billion or corporate travel in 1990 (American Express, 1989-1990). Clemens in his studies has hypothesized that discontinuity in an environment create an opportunity for strategic applications of IT. Again, gaining competitive advantage doesn't relate to gaining technological expertise, it is the way that information is used in the organization. Even though competitors may duplicate your technology you can always gain a relative advantage and sustain it. Information technology alone cannot change anything if an organization doesn't have a sound vision and culture and doesn't know how to implement it. It takes the technological expertise and the leadership and management to produce sound financial results for the organization. INFORMATION TECHNOLOGY IN MANUFACTURING COMPANIES When it comes to manufacturing, gigantic companies like Toyota Motor Corp. has used Information Technology systems to gain competitive advantage and has sustained it over the years. This company used the world-known supply chain management and business process management technology to eliminate waste, limit inventory buildup and continually improve production (Garretson, 2007). Its technology leadership finally helped topple General Motors as the World's No 1 automaker. INFORMATION TECHNOLOGY IN THE CONSUMER SECTOR At P&G, the company relies on information technology to gain the advantage over its competitors. They have a history of using data mining to track down and adjust sales and promotion in relative real time and they continue to make it better. The CIO Philippo Passerini is so dedicated to companies analytical software that he moved all his advanced and sophisticated analysts from their operating units into the central organization with direct reporting to him. The concept of IT as a powerful competitive tool has been strongly emphasized in many reports. However, there are drawbacks to implementation of information technology systems as well. Strategic technology initiatives might be under strict observation and scrutiny these days, however, it stills helps high performance companies to gain a competitive edge. Big IT projects such as American Airlines SABRE computerized registration systems etc once so celebrated are now few. All this has happened thanks to the highly celebrated article of G. Carr "It Doesn't Matter" from the 2003 Harvard business Review. The author emphasized on the fact that information technology software increases the technological dependence which can never cover up for human intelligence. However, some organizations are reluctant to take Carr's word for it and they still emphasize that technology-driven innovation is still creating long lasting competitive advantages. The biggest success example is that of Wal-Mart. This company collects massive amounts of data on sales and inventory and shares it with more then 17000 suppliers across the globe with the help of its Retail Link. Bibliography 1. American Express, Survey of Business Travel Management. New York: American Express, 1989, 1990. 2. Clemens, Row. (1991) Information Technology at Rosenbluth Travel: Competitive Advantage in a Rapidly Growing Global Service Company, Journal of Management Information Systems. 3. Garretson, Rob (2007) It Still Matters. CIO Insight. Retrieved from www.cioinsight.com (accessed on November 5th'2007) 4. Wager, K, Lee, F., and Glaser, J. (2005) Managing Health Care Information Systems: A practical approach for healthcare Executives. San Francisco. 5. T.C. Powel, A. Dent-Micallef. Information technology as competitive advantage: the role of human, business and technology resources. Strategic Management Journal Vol. 18, issue 5, pages 375-405. Read More