Business Information Systems - Coursework Example

Business information systems BUSINESS INFORMATION SYSTEMS Information systems are very important in day to day running of business since it is an interface between people, organization. In business, information system helps in various functional departments of the premises. For instance, the board of management would need the technology to support in forecasting, planning, control, coordination , decision making and operational activities in an organization. Functions of business information system These functions are generally classified under three categories: Transaction processing The main incentive of starting a business is to make profit; this is achieved through a chain of activities that only becomes possible through dealing with external entities. In trade making purchases or sales or even production of goods require records to validate, and convey background information for references to be made (DOOM, 2009). The output of information system in business there is response towards any inquiry that may be launched later on in any form of litigation against the enterprise. Management reporting This function concerned productions of final statements with regard to business information that the users may require for own economic decision. These outputs are nothing but the management reports for planning, evaluation, control and monitoring reasons. The major reports found in the business are as bellow: i. Ad hoc reports and ad hoc inquiry responses if any in the business setting. ii. Board of management report with regard to the resolution passed in general meeting. Decision support There are various types of decisions supported by information system in business. For example, allowing or refusing purchase of goods by a customer, awarding discounts on purchases and reordering for more stock when the levels have gone low. In addition the database of reference would be of helpful in extracting information required to support such decisions. Programmable decisions These decisions tend to be routine in nature for instance, replenishment of inventory decisions. Pre-planned standardized approach is employed to make a specific methodology as in housed program. This procedure specifies what to be done before the final decision rule ratified. Consequently, the customer’s outstanding balance will determine whether the vendor would be granted a credit purchase or not (MORABITO, 2013). On the other side the current stock levels will establish grounds of placing an order, together with the award of discount based on gross value of the sale and the discount rate as required in addition to the minimum value of sales that qualifies for such discount. The major contributions of information technology the achieve success of business. Communication – digital communication using computers is popular and is being adopted worldwide as opposed to analogue communication which uses the telephony system. Computers have greatly enhanced communication through email communication, electronic data interchange, and electronic funds transfer (WIGAND, 2003). Banking sector has also incorporated computer systems in such areas as credit analysis, fund transfers, customer relations, automated teller machines, home banking, and online banking. On management, The proliferations of management information systems have aided greatly the processes of managerial planning, controlling, directing as well as decision-making. Computers are used in organization for transaction processing, managerial control as well as decision support (CHAFFEY, & WOOD, 2010). Other specific areas where computer systems have been incorporated include sales and marketing, accounting, customer service etc. In the field of manufacturing and production – computer aided design (CAD), computer integrated manufacturing (CIM), and process control systems among other technologies are computer systems that have revolutionized the production industry. Systems that support these needs are generally referred to as Business Information Systems (BIS). In airline and hotel industry reservation systems – guest booking, accommodation and bills accounting using computers in hotels have made the process to be more efficient and faster. Airline computer reservation systems have also enhanced and streamlined air travel across major airlines. Major players in the industry have also adopted online reservation systems. a) e-commerce Electronic commerce (e-commerce) also relates to the use of information technology such as computers and telecommunications to computerize the process and procedures of buying and selling of goods and services. With regard to this, the following have been established in bide to globalizing business operations. 1. Electronic market; this is a situation whereby customers and vendors who have subscribed to a network system trade all the way through their terminals. It gives buyer a chance to access the webs of his suppliers, make orders through the internet. 2. Electronic purse This refers to a digital envelope used to wrap up electronic cash when it is being remitted to the bank. This is of great help to the customer who do their purchases online where electronic cash software generates a ‘coin’ in an amount specified by the client and sends this to the users bank wrapped in a virtual purse. The bank then withdraws the amount as specified from the user’s account and deposits it to the supplier’s account (LUCEY, 2004). Disadvantages of Computerized BIS Lack of - Judgment: despite advances in AI techniques and expert systems, computer-based IS are considered incapable of solving problems using their own judgment. Flexibility: computer-based IS are unable to react to unexpected situations and events. Reliability: lacks the creativity of human being. They are unable to think in the abstract and are therefore restricted in their ability to discover new ways of improving processes. Intuition: One might use intuition to gauge the emotional state of a person before deciding whether or not to give them a bad news. Qualitative information: Managers often make unstructured decisions based on the recommendation of others. Their confidence in the person they are dealing with often has a major influence on the decision itself. Business information system usage Operational level usage is greater because of the need for higher levels of automation and the structure of tasks undertaken (BOCIJ, & GREASLEY, 2006). Important operational activities are data processing, which involves handling the large volumes of data arising from an organization’s daily activities. The most common of these are: Transaction processing: deal with sales and purchasing transactions. Process control systems: handle large volumes of data created by the production process. But, this approach to BIS usage leads to decentralization of IS applications and poor information transfer between departments (POLS, ET AL. 2007). BIS – Enterprise systems Enterprise systems address the decentralization problem by supporting business processes across functional boundaries These systems use the Internet to integrate information within the business and with customers, suppliers and partners (BOCIJ, et al. 2008). The main elements of an enterprise system are: Enterprise resource planning (ERP): concerned with internal production, distribution, and financial processes Customer relationship management (CRM): concerned with sales, marketing and service Supply chain management (SCM): deals with the flow of materials, information and customers through the supply chain (WHITE, 2008). Supplier relationship management (SRM): handles the sourcing, purchasing and warehousing of goods and services. Business information systems play a key role in business growth and survival by supporting the constant race for competitive advantage. Business Information System and competitive advantage Organizations must try to obtain competitive advantage (strategic advantage) if they are to survive and grow. Advantages are specific compensation that are difficult for other organizations to copy (due to technology or cost). In order to obtain this competitive advantage, organizations can adopt three Competitive strategies; that is cost advantage and differentiation of the products. This can be achieved through focusing on the activities that contribute to core competencies to outweigh the competitor in the market. It can also be achieved by appreciation of costs to employ strategies to gain the market share considerably and maintaining value addition. In the course of innovation; new ways of doing business are developed enabling assessments of risks that could hinder the business from prospering. However, despite all milestones in this digital age, the following are associated cost that must be incurred to see the ends meet; Since globalization requires network connectivity and other digital technologies, an organization who intends to implement e- business would take into consideration the cost of setting up and maintaining an intranet. Such cost should be clearly justified through cost benefit analysis. Consequently, security and privacy comes into play , this would imply that adequate security checks put in place to protect the enterprise’s data which may lead to deterioration of its operation if any case they are leaked by the rival competitors (TAYLOR, & FARRELL, 1995). With IT business process change the requirements, it mean coming up with structured to be shared. Employees may also of resistance to such change; this is because it is into the public domain that integration of IT into the business is associated with redundancy. This make the employees to be on the opposing side making it very difficult for the organization tom grow. Conclusion In business setting every individual is prone to commit fraud; the potential of an employee depends on security of the system, company’s policy. It is therefore important to set up control techniques of curbing this vice. This can be done by biometric control, data encryption and logical access which refers to controlling access to terminals of which should be only accessed by authorized personnel. Examples of logical controls are use of personal identification, and passwords. References BOCIJ, P., & GREASLEY, A. (2006). Business information systems: technology, development and management for the e-business. Harlow [u.a.], Financial Times Prentice Hall. BOCIJ, P., GREASLEY, A., & HICKIE, S. (2008). Business information systems: technology, development and management. Harlow, England, FT Prentice Hall. CHAFFEY, D., & WOOD, S. (2010). Business information management: improving performance using information systems. Harlow, Pearson Education. DOOM, C. (2009). An introduction to business information management. Brussels, ASP. LUCEY, T. (2004). Management information systems. London, Thomson Learning. MORABITO, V. (2013). Business technology organization managing digital information technology for value creation - the SIGMA approach. Heidelberg, Springer. http://oclc- marc.ebrary.com/Doc?id=10617888. POLS, R. V. D., DONATZ, R., OUTVORST, F. V., & BENT, H. V. D. (2007). BiSL: a framework for business administration and information management. [Zaltbommel], Van Haren Publishing. TAYLOR, A., & FARRELL, S. (1995). Information management for business. Metuchen, N.J [u.a.], Scarecrow Press. WHITE, K. (2008). Business information organization: 21st century best practice. Melbourne, Ten Step Business Publications. WIGAND, R. T. (2003). Introduction to business information systems. Berlin [u.a.], Springer- Verl. Read More