Business Information Systems - Essay Example

?Impact of Information Systems in Today’s Booming World As society progressed to 21st century, the role of information technology has been drastically enhanced. The modern world of commerce heavily relies on information systems since everything is happened electronically. The use of information systems is critical for any business to thrive under these conditions. An understanding of building a solid foundation of information systems in business is utilized form e-business, e-commerce operations, enterprise collaboration and management. Data and information are critical components of information systems that utilized by firms. The innovation of information systems has enabled commerce to thrive since it allows organizations to be cost-effective, gain competitive edge, and efficient in their industry. Hence, the usage of information has drastically been enhanced since the advent of systems design. One cannot understand the importance of information systems without comprehending what actually an information systems. An information system is a collaborative effort that strives to connect people, network, software, hardware, and data in order to facilitate the daily operations of a business (Foulds, 2006, p. 9). There are many types of information systems that consist of: manual, informal, formal, and computer-based. Information systems in essence give valuable data to organizations that can be given evaluated upon, analyzed, and enhance the value of the key goals that the organization possesses (Nocera, 2007, p. 9). Information Systems are important because establishing a foundation for responsible use of technology. Managing information systems stems from internetwork enterprises. Hence, the field of information systems has become critical aspects of business administration. One of the key innovations that business professionals implement is an IS Framework (Pradhan, 2010, p. 13). IS Framework is used by business professionals who need to gain competitive strategies (Pradhan, 2010, p. 14). Thus, this competitive advantage allows firms to be cost-effective by becoming cost leaders. A primary example of a company that uses IS Framework is Wal-Mart. Wal-Mart excels in providing products and services at a very low competitive price. In addition, IS Framework allows businesses to be headfirst as the leader in technology as synchronization of software and data management of customer information (Pradhan, 2010, p. 17). Likewise, the IS framework allows businesses to communicate the whole supply management that is heavily associated with the customers’ demands. For instance, the order to cash process in a business requires several steps (Pradhan, 2010, p. 20). When the customer places the order, the sales order department requires credit approval from the credit department. The credit department then informs the sales order department disposition of credit request. At these stages, the use of technology is extensive (Cameron, 2009, p. 7). The credit and sales department can use of point-of-sale technologies to scan the barcode of products. In addition, the innovation of technologies can use barcodes to process the order (Cameron, 2009, p. 10). Next, sales order department acknowledges customer order notifies warehouse, revenue collection process, and payroll process. In essence, it each step of the horizontal information flows consists of heavy utilization of technology (Cameron, 2009, p. 11). Another key issue that information systems addressed was an organization’s problems regarding differentiation. Prior to the introduction of these systems, few companies possessed the ability to deliver different products and services (Foulds, 2006, p. 10). With the help of automation systems as the result of information systems, companies were able to customize products based on customer needs. Companies were able to take prototypes and then enhance the functionality features due to high levels of customization that systems had to offer (Foulds, 2006, p. 11). This idea was essentially non-existent, but was quickly adapted amongst companies with the arrival of these systems. Companies not only were able to penetrate the market industry but also become niche leaders. One example of how a company does not choose to be cost-effective can be seen through Rolex. Rolex does not seek to be cost effective but uses information systems to let individuals customize their products and gain market edge (Foulds, 2006, 15). Another fundamental aspect that solidifies commerce in information technology is the importance of knowledge management systems. This particular type of systems is critical for many reasons (Shivani, 2011, p. 10). First and foremost, it enables businesses to create and share information. This specific information system is used to facilitate firms where employees can create new knowledge that all employees can collaborate with head directors (Shivani, 2011, p. 10). One of the primary examples of this can be seen through the innovation of Microsoft PowerPoint. This software is an excellent example of how information system technology allows users to display data in a clean and organized manner (Shivani, 2011, p. 15). Prior to advent of this system, many firms relied on big poster boards and massive amounts of paperwork to showcase their projects to angel investors. However, the innovation of PowerPoint enabled individuals to put the necessary data in a manner, which could be customized and formatted in a particular manner. The development of information systems management is vital towards any strategic planning for firms. Corporations that develop business plans always associate their strategic planning with extensive use of management information systems (Shivani, 2011, p. 22). One cannot diminish the fact that an information system is necessary as it accounts for all the external influences that impact the business. Forces such as political, technological, government and economical are unexpected and can be detrimental to organizations. In addition, the new information systems must take account for threat of new entrants of other organizations that can utilize the same technology (Stair, 2006, p. 25). Hence, the innovation of creating a sound and safe business plan requires heavy usage of information systems. Every business plan in today’s competitive arena conducts a SWOT analysis using the technology of information systems. Gryphon technologies is excellent because it aids organizations overcome a wide variety of technology and business issues that cost them time and money. In the past years, information systems were developed simply for businesses to be efficient and flexible. However, the new information systems must be able to comprehend the relationship between suppliers and customers (Stair, 2006, p. 372). One of the key things that information systems facilitate business is storing and manipulating date storage system. In today’s modern world, the creation of databases has been a vital toward the flourishment of an organization. Databases enable organizations to create, store, modify customer information. Databases also enable organizations to check inventory, order new items, and do product resets. Any organization can use databases to critically analyze their market and industry in order to gain a competitive advantage (Stair, 2006, p. 374). Competitive advantages is defined as a long-term benefit to a company over its competition, which can result in higher quality of customer service, better products and be cost-effective. Furthermore, they can use the information systems to attract customers through promotions via coupons for their products. A prime example of can be brilliantly seen in Microsoft Excel (Stair , 2006, p. 376). Microsoft Excel enables firms to organize data in rows and columns that would enable business analysts to analyze data. Excel is part of analogy known as Electronic Record Management, a system that is able to store, modify and edit data. Another example of how firms utilize information systems can be seen through the actions of Circuit City. Circuit city is a prominent company that sells consumer goods in the electronics business. This particular company tends to use information systems to enhance sales and deliver goods to their consumers in an effective manner. This is one of the few examples of the drastic impact of information systems facilitate business. Prior to the development of information systems, most companies were not efficient and lacked the capability of running a smooth business. Inventory was one of the most critical aspects that the companies struggled to maintain. With the advent of the information system, companies revolutionized a way to maintain inventory via the channels of LIFO and FIFO methods (Stair, 2006, p. 300). Retail companies such as Walgreens and Wal-Mart are prime examples of the initiating of business through information systems. When a customer comes to a brick-and-mortar store and buys a product; all systems of management information systems get engaged. Through the development of information systems, the whole process of inventory is smoother. As soon as the product is purchased by the customer at the point-of-sale, the database is notified that the product is purchased from the store (Stair, 2006, p. 372). Moreover, retailers use Telxon, a new type of technology and a device that drastically enhances the inventory process. The Telxon is very user-friendly, and allows managers to scan items utilizing the barcode (Barcoding: About Telxon, 2011, p. 1). When an item is scanned, the Telxon compares the actual inventory of items that are in stock versus estimated inventory (Barcoding: About Telxon, 2011, p. 1). This ensures that their no deficiency in inventory and the actual items that are placed in the store. Lastly, the usage of Telxon can be extremely helpful for business managers as it allows them to obtain reports on sales, actual count, price of a particular item, and the unit price (Barcoding: About Telxon, 2011, p. 1). Business usually utilized computers for simple operations such payroll, human resources, and payroll data. The impact of information systems enabled applications to be more sophisticated and allowed firms to store information and synchronize with other devices. As more data was stored in servers, data become frequently used by management to print reports and analyze the current conditions of the company. Information systems served as a catalyst that give rise to decision support systems, enterprise resource planning (ERP), supply chain management (SCM), and customer relationship management (CRM) (Mentzer, 2001, p. 16). Prior to development of management information systems, businesses and other firms had to report manually periodically. Accounting was done through the traditional manner which was ineffective and delayed the business process. Data had to be stored through file cabinets, which was ineffective and hard to access. Data was just massive amount of information that served no purpose to companies. Information systems facilitated the initiation of commerce in the past in several ways. One of the reasons it supplemented firms in the past is by providing knowledge, data, and information. Businesses were able to provide information to customers about simple things such as tracking notifications. Information systems were the pioneers of logistics in every organization (Abramowicz, 2007, p. 11). It was a simple but an effective tool that organizations can use. Moreover, the vitality of management information systems shaped the business strategies of commerce in the past. Information systems also impacted policies and government regulations. Supply chain management was one of the first products that resulted via information systems. Supply chain management can be dated as far as the 1980’s and tremendously helped commerce become efficient in that particular decade (Mentzer, 2001, p. 5). During the 1960s and 1980’s, SCM enabled organizations to be more integrated than ever. Moreover, the birth of Enterprise Resource along with supply chain management solutions allowed businesses to excel in customer service during that time period (Mentzer, 2001, p. 6). In addition, it allowed firms to devise transportation strategies, collaborate with logistics, make product decisions, and help choose customers on payment methods. Prior to the emergence of these critical systems, payments were accrued and stored in general journals. However after the advent of these systems enabled businesses to implement new technology such as direct deposit and automated checking (Halale, 2010, p. 26). In essence, options for payment were extremely as customers can only pay via cash and check. However the advent of these information systems enabled businesses to accept all types of payment such as PayPal, cash, credit, direct deposit, etc (Abramowicz, 2007, p. 50). One cannot diminish the importance of these systems that dramatically changed the dynamics of how the business operates. Without a doubt, information systems have tremendously impacted global commerce throughout the world. Information systems enabled commerce to gain competitive advantage and become cost-effective. Furthermore, the advent of technology systems drastically enhanced networking and collaboration amongst employees. Moreover, supply chain management (SCM) allows firms to be effective with their logistic system and dramatically enhance their features (Halale, 2010, p. 30). Lastly, information systems have allowed companies to enhance their options and gain higher level of customer service. The impact of information system undoubtedly is a vital component of commerce that can never be eliminated even in the future generations. Reference List Abramowicz, W. and Mayr, H.C. 2007. Technologies for business information systems . Dordrecht: Springer. 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Proceedings of the 3rd international conference on Intercultural collaboration. Copenhagen, Denmark. Pradhan, A.R.2010. Infrastructure management information system framework for disasters. Shivani, J. 2011. Management information system . New Delhi: Centrum Press. Stair, R.W., and Reynolds, G.M. 2006. Fundamentals of Information Systems . 3rd ed. Cambridge, Boston: Thomson Learning. Read More